A tender offer is a transaction in which existing shareholders of a startup are given the opportunity to sell a portion or all of their shares to a buyer at a predetermined price. A tender offer is typically a one-off event structured by the company and provides an avenue for shareholders, including employees and early investors, to convert their illiquid equity into cash before a traditional liquidity event like an IPO or acquisition occurs.

There are different types of tender offers for private companies, including share buybacks and third-party tender offers. In a share buyback, the company repurchases shares from its shareholders, which can include employees and investors. In a third-party tender offer, the company allows external investors to purchase shares from existing shareholders.