By Soobin Kim

As a founder starts and grows a company, the founder may consider selling her shares in the company prior to an exit via a sale of the company or an initial public offering.  Such sale, typically called a secondary sale, helps a founder meet needs for necessary expenditures or reduce her risk tied to the company.  In the past, the founder’s sale of her shares was viewed as signaling lack of confidence and misaligning the founder’s interests, and therefore, investors often blocked the founder’s sale of her equity.