The Timeline No One Mentions in Your Offer Letter
When a startup pitches you equity as part of comp, they sell the upside. What they do not mention: the timeline to actual cash.
The median tech company takes 11.5 years to IPO. Then the distributions start, slowly. Venture funds that backed these companies are still holding stock years after the public debut.
SpaceX is the reference case. Founded in 2002, it went public in June 2026, 24 years in. Early backer Valor Equity Partners has distributed 8.5% of its position so far. Elon Musk's shares are locked until June 2027, a full year after IPO. He will be 25 years past founding before his first sale.
That pattern holds across recent tech IPOs:
Snowflake: 8 years to IPO, then 15 months for lead investor Sutter Hill to get down to 1.3% ownership. That is the fast case.
Rubrik: Lightspeed led the Series A in 2014. The company went public April 2024. As of mid-2026, Lightspeed is 82% out, 12.4 years after the first check. Founder Bipul Sinha still holds 87% of his shares, 12.7 years in.
Samsara: Six and a half years to IPO in December 2021. a16z was still making distributions in September 2025, nearly four years later. Co-founder John Bicket is selling about 4% of his stake per year.
Figma: Founded 2012, public July 2025. Lead investor Index Ventures distributed about 5% of its stake by August 2026 and still holds 50.3 million shares. Founder Dylan Field sold roughly 9% of his position in the first year, retains 90%.
What This Means for Sales Comp Decisions
If you are evaluating a startup offer with meaningful equity, run the math on two timelines:
- Time to liquidity event: 11.5 years median, longer if the company is early stage.
- Time to actual cash: Add 2-3 years post-IPO for distributions to ramp, assuming lockup periods and controlled selling.
That makes equity a 13-15 year bet in the best case. For early employees, factor in dilution through multiple funding rounds before exit.
SpaceX context: it now generates roughly $15-18 billion in revenue and $8 billion in profit, handles 80% of U.S. rocket launches, and runs Starlink as a major connectivity business. That scale took 24 years to build and another year (so far) to start converting to founder liquidity.
Comp transparency matters here. When a startup tells you about equity upside, ask:
- What is the current valuation?
- How many funding rounds are likely before exit?
- What does dilution look like for early employee grants?
- What is the realistic timeline to IPO, and what happens to your shares if they sell instead?
Equity is real compensation, but it is not cash until it is cash. That distinction matters when you are comparing a $120k base plus options against a $160k OTE role with no equity. The second number is money you can spend. The first is a long-term bet with a 13-year clock.