Who’s actually taking on the most financial risk at a seed-stage startup?

The venture capitalist who might bet on 20 or more companies each year; the founder, whose livelihood and reputation are tied to a single outcome; or a senior engineer with a pre-diluted stock grant worth 0.5% of the company?

Startup workers generally change jobs every 2-3 years. Stock options vest over four. It might take a decade or longer to reach an IPO, which means most employees won’t be standing behind their co-founders when (or if) they ring the NASDAQ closing bell.

Departing employees typically have 90 days to exercise vested options. Raising cash during that countdown can be daunting between jobs, especially for H1-B visa holders who must secure new employment within 60 days or leave the country.

Most employees will never experience a liquidity event, but stock options remain Silicon Valley’s love language. And that’s why more tech workers should know how the secondary market really works.

In this week’s conversation with Ben Black, Co-Founder and Managing Director of Akkadian Ventures, we unpack what startup employees need to understand about getting liquid.

“You have to be skeptical, and you have to advocate for yourself,” he says. “Nobody is going to take care of you. Nobody.”

This episode isn’t about getting rich. It’s about managing your risk.

No one else is underwriting your career. You are.

* This episode is for educational purposes only and should not be considered financial advice.

(2:12) How Ben got into the secondary market and founded Akkadian

(5:33) “The vast majority of really good companies now have secondary programs.”

(8:39) Secondaries generate “a very significant part of the return of the large funds.”

(9:57) Why are most companies still on a four-year vesting cliff?

(12:55) Things to consider when you’re 25% vested

(15:22) Why so many tech workers never exercise their vested options

(16:49) A framework for identifying the right time to sell

(21:26) How to access the secondary market if your company doesn’t offer a structured program

(30:09) “I do see a lot of bad behavior among employees… using information that they’re not supposed to use.”

(32:06) Startup employees: cultivate a strong relationship with your CFO

(34:08) The #1 reason why employees sell secondaries (and a few edge cases)

(38:44) “You have to be really skeptical, and you need to take a lot of shots on goal.”

(45:11) How many founders are bootstrapping startups using the secondary market?

(48:44) How long does it take to get liquid?

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Thanks for reading,

— Walter.