Working for a start-up can be a nerve-racking endeavour. Equity remuneration helps employees keep the faith. Restricted stock units and stock options are key sources of pay for newly formed tech companies. Handily, they keep cash payouts low too.
But a dearth of initial public offerings this year has meant a lack of exits for workers and early investors.
Despite recent IPOs from the likes of Arm and Birkenstock, the number of listings in 2023 is only about a tenth of 2021’s record. The longer a company waits, the greater the risk that it will be pushed to list at a time not of its choosing. Online grocery delivery company Instacart went public in September valued at a quarter the size of its last private valuation of $39bn. The impetus, said chief executive Fidji Simo, was giving employees liquidity.