Transfer & structure
Divorce and Marital Property Division of a Startup Stake
A real, recurring reason angels end up selling — and illiquidity makes the split harder than a brokerage account.
What it is
In a divorce, an illiquid startup stake acquired during the marriage is typically treated as marital property subject to division — but its illiquidity and lack of a public price make dividing it meaningfully harder than splitting a public brokerage account.
Why it matters for a secondary
This is a genuine, recurring path into becoming a secondary seller — needing a clean, defensible valuation to divide (or buy out a spouse's share of) a position that can't simply be split like cash. A negotiated secondary-style valuation — last round, discount-adjusted — is often the practical reference point both parties (and courts) end up using.
Quick facts
- Typical treatment
- Value acquired during the marriage is generally marital property, subject to your state's specific rules
- Valuation approach commonly used
- Same last-round-minus-discount logic as any secondary — see valuing an illiquid stake
- Common resolution
- One spouse buys out the other's share, sometimes funded by a partial secondary sale to a third party
Common mistake: Using the company's headline last-round "valuation" as the marital-property value with no illiquidity discount applied at all.