IPO Stock Options Planning

Strategic, Evidence-Based Planning from Day One

Company-issued stock options present a unique opportunity to build wealth. WRP provides expert advice to guide executives and employees in pre-IPO companies through the complex landscape of stock options and the IPO process.

How WRP Can Help

As your company progresses towards an IPO, you will have many important choices to make. WRP will keep you informed of critical deadlines and provide the guidance you need to make the most of the opportunities before you.

Making a timely 83(b) election can limit your tax liability by making your shares taxable at the time of granting rather than at the time of vesting. You have just 30 days to make this election. After one year, sales of the stock are treated as long-term capital gains.

If certain requirements are met, capital gains on small business stock can be exempted from federal taxes. In order for your stock to be treated as QSBS,

  • You must hold the stock for at least five years.
  • The company must be a C corporation with less than $50 million in assets at the time the stock is issued. As the company progresses through funding rounds, it is important to keep records to demonstrate when this threshold is met.
  • During the five-year holding period, 80% of the company’s assets must be used for operations in its qualified trade or business.
  • The stock must be acquired from the company for money, property, or services

When should you sell your stock, and how much should you sell? Timing is everything, not just for getting a good price for your shares but also for managing your tax burden and avoiding insider trading. WRP can help you develop a strategy for initial and future sales and document your plan to comply with Rule 10b5-1 of the Securities and Exchange Act.

Borrowing against your company-issued stock can be an attractive option if you need access to cash before your company reaches IPO. Using your shares as collateral on a loan gives you access to some of the value of your stock before it can be sold on the market. By borrowing against your shares, you can potentially defer capital gains tax and keep some upside potential.

As assets that are expected to increase in value, stock options represent an important element of your estate plan. WRP can work with you to mitigate the tax implications of transferring wealth to your heirs.

Our IPO Philosophy

WRP takes a personalized approach to helping clients through the IPO process and beyond. First, we’ll take the time to get to know you as an individual and design a unique plan tailored to your goals, priorities, and risk appetite. Then, we’ll employ our combined expertise in financial planning and tax to mitigate your tax burden while building your wealth.

Explore Our IPO Timeline

Ready to Learn More?

phone: (408) 549-8533

10 Almaden Blvd., 15th Floor, San Jose, CA 95113

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