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🌍 US & Europe · Vesting & exerciseSell-to-cover
Also called: sell to cover
In one line
Selling just enough shares to pay the tax (or exercise cost) a grant triggers, keeping the rest.
In plain English
When vesting or exercising creates a tax bill, sell-to-cover sells a slice of the shares to pay it, so you don't need outside cash. Common with RSUs at public companies; at private ones it needs a liquidity event.
If you were explaining it to a 5-year-old
You get 10 toys but owe 3 toys in tax. You sell exactly 3 to pay, and keep 7 — no coins out of your own pocket.
Why it matters when you sell
Sell-to-cover is often how employees fund the tax on exercising or vesting without finding cash — but privately it depends on a sale being possible at all.
Related terms
Put it to use
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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.