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Virtual shares

Also called: phantom shares (Europe), virtual stock

In one line

Contractual rights that pay out the value of real shares in cash, common in Europe where issuing real shares is cumbersome.

In plain English

Virtual shares (the basis of German VSOPs and similar) mimic owning equity economically, paying cash at an exit, without giving you real stock or votes.

If you were explaining it to a 5-year-old

A promise to pay you what a toy would have earned, in coins, without ever giving you a real toy.

Why it matters when you sell

Virtual shares usually only pay at a company exit and can't be sold in a secondary, tying your liquidity to the company's.

Related terms

VSOP (Virtual Stock Option Plan)Phantom stockStock appreciation right (SAR)Dry income (equity tax)

Put it to use

How to get liquidity (Europe)

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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.