Pre-IPO
Annotated diagram of Schedule DTax errors can be costly! Don't draw unwanted attention from the IRS. Our Tax Center explains and illustrates the tax rules for sales of company stock, W-2s, withholding, estimated taxes, AMT, and more.

Articles

NEW! Initial Public Offerings: Leading Financial Advisors On Equity Compensation Planning

An initial public offering (IPO) presents unique financial- and tax-planning circumstances for employees with equity compensation and holdings of company shares. We asked several leading financial advisors for their ideas on pre- and post-IPO planning. This article presents their responses in their own words.

Stockbrokers' Secrets: Five Financial-Planning Insights For Equity Compensation At IPO Companies

My clients who work at startup companies preparing for an initial public offering (IPO) are giddy with thoughts of the wealth and opportunities their pre-IPO stock compensation will provide. I try to set them straight with five financial-planning points that may help to manage their post-IPO expectations.

NEW! Private Company Stock Options And RSUs: SEC Filings By IPO Companies Reveal What To Expect This is premium content

Stock grants in privately held companies can be structured in surprisingly diverse ways, many of which are not commonly known. This article looks at stock plan details in the Form S-1 SEC registration statements of IPO companies to explain how stock options and restricted stock grants at private companies may be different and more complex than the standard types of grants used by public companies.
Show More Articles (5 more)

Your Company Is Going Public: How Your Stock Compensation May Change This is premium content

Podcast included! As privately held companies prepare for their market debuts, they make changes in their equity compensation programs beyond just stock options. This article looks at some of the shifts you can expect in your stock grants from the startup stage through the IPO and the post-IPO periods.

Pre-IPO Company Employees: Their Stock Option Tax Dilemma This is premium content

The biggest surprise for employees with stock options at pre-IPO companies is often the amount of taxes they need to pay when their company goes public or is acquired. When they exercise their options after the IPO or as part of the acquisition, selling the stock at the same time, a large chunk of their proceeds goes to pay federal and state taxes. This article looks at ways to reduce this tax burden.

Techniques To Defer Or Reduce Taxes On The Sale Of Your Company's Shares (Part 1): QSB Stock This is premium content

UPDATES! Finding legal techniques to minimize taxes is almost as popular in the US as stock compensation. These sophisticated techniques with founder's stock and options can defer or reduce taxes.

Understanding The Risks In Your Pre-IPO Stock Options (Part 2) This is premium content

Stock options and restricted stock in pre-IPO companies can create substantial wealth, but you need to understand what might happen to your stock grants in venture capital financings, in an acquisition, or in an initial public offering. While Part 1 looks at venture financings and M&A deals, Part 2 analyzes IPOs.

Stomach Volatility In Your Company's Stock Without Losing Your Mind

Stock options, restricted stock units, and other types of equity compensation are valuable benefits. However, when the company's stock price becomes a rollercoaster, remember that equity compensation is a long-term deal. This article offers expert advice for coping with stock-price volatility.

FAQs

After the IPO, are there any restrictions on how soon I can sell shares of my company's stock?

You can expect SEC and contractual restrictions on your freedom to sell your company stock immediately after the public offering. The exact number of days until you can sell depends on...

My company will go public soon. Can it grant me options now at an exercise price that is substantially lower than the expected IPO price? This is premium content

Valuation of stock in pre-IPO companies remains as much an art as a science. However, as the company nears the actual IPO, reliable benchmarks exist...

UPDATES! In a private company, can restricted stock and stock option grants be structured so that they vest only when the company goes public or gets acquired? How is this taxed? This is premium content

Companies have flexibility in setting the conditions on which their stock grants can vest. This type of double-trigger vesting allows your company to base the vesting of your grant on...
Show More FAQs (13 more)

UPDATES! Can my company use the IPO price as its ESPP's grant-date price? This is premium content

If an IPO company wants to lock in the IPO price as the initial grant-date price of its employee stock purchase plan (ESPP), it can do so for the initial offering period of up to 27 months...

How soon after an IPO can I sell my stock under Rule 144? This is premium content

This can depend on whether you are still affiliated with the company. For options and stock issued under Rule 701...

A private equity firm is buying my company. What will happen to my stock options and restricted stock? This is premium content

The vesting of the grant will probably accelerate according to specifics in your stock plan or grant agreement. The grants will probably be cashed out. Depending on your level in the company and the length of your employment, you may receive a meaningful grant in your newly private company that will require you to...

My company is private. Can I set up a Rule 10b5-1 trading plan now so that I may start selling after the IPO lockup period? This is premium content

When you set up a Rule 10b5-1 trading plan, one of the key requirements is that you must not...

What is a "lockup"? This is premium content

You will face a lockup when your company goes public, or perhaps in an acquisition. A lockup is a contractual restraint on...

Are there ways around a lockup? This is premium content

Yes. Sometimes an underwriter and the company will release a portion of the lockup shares for sale before the lockup period expires. For example, Facebook did this in 2012 when it...

If I exercise my vested options during a lockup period, does the date for calculating the spread occur at exercise or at the end of the lockup, when I can sell the stock? This is premium content

Lockups prevent you from selling the shares, but you still own them, and the tax-treatment date is not deferred...

If I am an "affiliate" of my company, how difficult is it to register my stock for resale to the public? This is premium content

Except at times when a number of affiliates will simultaneously sell a portion of their stock, a public company is unlikely to register an affiliate's stock for resale...

What are the company-information requirements of Rule 144 that affect my stock sales? This is premium content

The SEC Rule 144 requirement that current public information about the company be available is met if the company has filed all the required reports under the Securities Exchange Act of 1934...

Why do some companies issue "tracking stock"? This is premium content

Tracking stock is a separate class or series of common stock of a corporation...

How do I have the legend removed from my restricted securities? This is premium content

You need to show that resale does not require you or your company to...