The modern startup was built on a simple exchange. Join early, accept less cash than a corporate salary would pay, and in return own a real slice of what you are helping to build.
Equity was the great equaliser: the mechanism that turned employees into owners and let ordinary engineers, designers and operators share in the value they created. For two decades that bargain has powered the technology ecosystem on both sides of the Atlantic, and it is still the headline promise on almost every European startup’s offer letter.
The trouble is what happened to the second half of the deal.
Where it broke
Two shifts have hollowed out the promise.
The first is time: companies now routinely stay private for a decade or more, long past the point where an early employee expected some kind of exit. The listing that used to convert paper into money arrives late, if at all. The second is the capital structure underneath the headline number. Late-stage valuations are set by the most recent and most senior investors, whose preferred shares are paid back first; the common stock that employees hold sits at the bottom of that stack. The result is that the valuation in the funding announcement and the amount an employee’s shares would actually fetch are two very different figures — and almost no one is told which is which.
That gap between paper wealth and realisable wealth is the heart of the problem. An employee can do the arithmetic (shares times the latest price) admire the number, and be completely wrong about what it means, because a valuation and a sellable stake are not the same thing. Working out the second number, rather than the first, is where most equity conversations should start: what a stake is really worth depends on the preference stack, the dilution and the odds of a liquidity event, not the press-release valuation.
The quiet forfeiture
Even employees who want to realise value often cannot. Vested options typically must be exercised within a short window after someone leaves (commonly ninety days), and exercising means paying the strike price, and frequently a tax bill on paper gains, before any shares can be sold.
For many people that upfront cost is simply unaffordable, so many walk away from their hard-won, fully vested equity. This is not a rare edge case; it is a well-documented pattern across the equity-management platforms that administer these plans. The ownership was granted, vested and earned — and then quietly forfeited, not because the company failed, but because the mechanics of turning it into money were out of reach.
Why Europe has it harder
Europe has one unambiguous counter-example. Revolut has run repeated employee secondaries — a 2025 sale at a $75bn valuation and again at roughly $115bn in 2026 — framed explicitly to give staff a way to cash out, with employees selling existing shares rather than the company raising new capital.
It is the clearest European proof that a startup can build a real, repeatable market for its own people. But it is the exception that proves the rule.
Below that thin top tier, the picture turns cold quickly, and the reasons are distinctly European. Employee-option regimes are fragmented across the continent: France’s BSPCE, the UK’s EMI, Germany’s slowly-reforming treatment; and the tax consequences of exercising or selling differ sharply from one country to the next, so two colleagues on the same grant can face entirely different outcomes.
Fewer late-stage European companies run their own liquidity programmes at all, and for Central and Eastern Europe the problem compounds: there are simply fewer names with the scale and investor demand to run a tender. The pattern is visible in the data behind our Liquidity Heat Index, which scores how realistically employees can sell vested equity before an IPO — and finds that reliable liquidity has concentrated in a handful of global mega-caps. The point is underlined by the ultimate exit: SpaceX stayed the most liquid private company on earth for years, running roughly semi-annual employee tenders, before graduating to a public listing on Nasdaq in 2026. A public market is liquidity in its final form; the question is what happens to everyone who never reaches it.
And company-run liquidity, where it exists, comes with a sting. If the ability to sell is something the company grants, it depends on the company’s policy rather than the employee’s wish, and the terms can be narrow. When Rippling ran its large 2024 employee tender, former employees who had gone to work for competitors were barred from taking part. The lesson for anyone holding options is that the transfer terms, not the valuation, decide whether equity is real.
What founders and employees can actually do
The fix is not bigger grants; but real ownership.
For founders, especially in CEE, this is also becoming a talent question. As the best people grow more equity-literate, “we offer generous options” carries less weight than “here is the realistic path to selling them.” A founder cannot manufacture a $75bn tender, but honest, early communication about the timeline, a longer post-termination exercise window, or even a modest structured liquidity event are becoming genuine differentiators in a region where most competitors offer none of them.
For employees, the takeaway is more direct: do not fall for the headline. Before treating a stake as wealth, ask the questions that actually determine its value: does the company run tenders, and for whom? What do the transfer terms permit? And what would you net after the cost of exercising and the tax in your country? A rough version of that calculation takes minutes, and it is a far better guide than any valuation in a press release: start with what your stake is really worth.
The startup economy thrived from turning employees into owners. Its next task is to make that ownership real and legible: something people can understand, value and, when the time comes, sell.
Until more European companies, and especially more across CEE, close the distance between paper and pocket, the broken half of the promise will keep deciding who actually benefits from the equity boom, and who merely frames the offer letter.
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