Pre-IPO Quiz

Pre-IPO Quiz

Stock compensation in pre-IPO companies can be very profitable if the company goes public or is acquired by a publicly traded company. However, the rules for equity compensation and stock in privately held companies can be tricky. See how much you have learned about equity awards at pre-IPO companies.

Please answer the following 10 questions. This quiz is also a course of study. The answer key links to content on the topic for follow-up reading. For in-depth courses of study that offer CE credits, see the myStockOptions Learning Center.

1. How does a pre-IPO company formally determine the value of its stock?

2. How can a privately held company create liquidity for its stock?

3. Are there restrictions on the ability to resell the stock of a pre-IPO company?

4. In a privately held company, can restricted stock and stock option grants be structured so that they vest only when the company goes public or gets acquired?

5. Can privately held companies grant restricted stock or restricted stock units?

6. What are early-exercise stock options in privately held companies?

7. Why do some pre-IPO companies offer early-exercise stock options?

8. Is the date for determining taxes at exercise or vesting delayed if the stock I receive is not registered with the SEC and I cannot immediately sell it?

9. What is a lockup?

10. For pre-IPO options and stock issued under Rule 701, how long does Rule 144 require you to wait before selling the shares?

Comments on this exam? Email

Customize This Quiz For Your Company

All of our quizzes are also available through our custom stock plan sites and as part of our content licensing to companies. We can even customize our quizzes to fit your stock plans. This makes the quizzes a useful tool for education and communications when you award new grants, switch from options to restricted stock, or near a major vesting date. For details of our corporate services and licensing, email

Continuing Education Credits For CEPs, CFPs, and More

The Learning Center has courses and exams offering continuing education credits for Certified Equity Professionals, Certified Financial Planners and Certified Private Wealth Advisors (CPWA) and Certified Investment Management Analysts (CIMA) through the I&WI. Each course features articles, FAQs, and podcasts, woven into an interactive learning tool that teaches the topics in a memorable way. The answer key for each exam also links to relevant content on for further reading and review.

The content is provided as an educational resource. shall not be liable for any errors or delays in the content, or any actions taken in reliance thereon.
Copyright © 2000-2023, Inc. is a federally registered trademark.

Please do not copy or excerpt this information without the express permission of
Contact for licensing information.