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🌍 US & Europe · Vesting & exerciseCashless exercise
Also called: cashless, sell-to-cover exercise
In one line
Exercising options without paying cash up front by immediately selling enough of the resulting shares to cover the cost and tax.
In plain English
Instead of funding the strike price yourself, you exercise and sell some shares in the same breath to pay for it. Only possible when there's a market or buyer — at private companies, usually only during a tender or secondary.
If you were explaining it to a 5-year-old
You use your voucher to get 10 toys, then instantly sell 3 of them to pay the shopkeeper for all 10. You keep 7, no coins needed up front.
Why it matters when you sell
Cashless exercise removes the cash barrier to getting shares — but at a private company it typically requires a liquidity window to be open.
Related terms
Put it to use
When you're ready to go deeper, there's an optional Equity Toolkit and Report.
Sources
A general market-practice term. See how we define and source the glossary in our methodology. General information, not advice.
Educational information only — not financial, tax or legal advice, and not an offer to buy or sell any security. Definitions are general; your own documents and local law govern your situation. PrivateTechShares is independent and not a broker or marketplace.