In the case where a private company has issued options or shares as a part of compensation, another way to pay back employees would be to do a stock buyback program. E.g. if I was an early employee and got options with a $1/share strike price, but the current going rate for new-employee options is $5/share, the company could offer to buy back my options from me at $4 each (or if I'd exercised those options, they could buy the shares back at the full $5 price).
If the general understanding was that the founders (well, board) weren't chasing an acquisition or IPO, this might be a good deal for employees. Of course, if the company is VC-backed (and the founders don't have majority control anymore), the VCs probably wouldn't go for this sort of thing.
I do actually wonder if the current trend of consolidation is driven in part by the standard VC-backed startup formula. Getting acquired is usually a lot easier than going public. Instead of startups fueling long-term competition, they just end up getting gobbled up by larger players most of the time, fueling consolidation and monopolistic behavior.
Even if it's VC backed, there's little reason for the VCs to prevent them doing a non-takeover tender offer in order to allow employees to cash out some (often capped) portion of their vested options and let in a new private shareholder.
And as someone who went through an acquisition exit in a just-shy-of-unicorn startup by a very big dog, yes, everyone's/VC's aversion to IPOs is definitely making it easier for said big dog companies to acquire people who in the past would have been shoe-ins for excellent IPOs.
If the general understanding was that the founders (well, board) weren't chasing an acquisition or IPO, this might be a good deal for employees. Of course, if the company is VC-backed (and the founders don't have majority control anymore), the VCs probably wouldn't go for this sort of thing.
I do actually wonder if the current trend of consolidation is driven in part by the standard VC-backed startup formula. Getting acquired is usually a lot easier than going public. Instead of startups fueling long-term competition, they just end up getting gobbled up by larger players most of the time, fueling consolidation and monopolistic behavior.