Thoughtful IPO Planning: Protect & Grow Your Wealth

An initial public offering (IPO) is an exciting milestone. It’s a moment when your equity—whether stock options, restricted stock units (RSUs) or other grants—can turn into significant financial wealth. But let’s be honest—an IPO can also be overwhelming, especially when it comes to tax strategies for IPO-related wealth. You might wonder: How do I manage equity compensation after an IPO? Should I sell my shares or hold them? What are the best tax strategies for RSUs and stock options during an IPO? These are big questions, and the answers aren’t always straightforward.

The good news? With thoughtful IPO planning and the right guidance, this milestone can serve as an opportunity to work toward long-term financial goals.

Why IPO planning is essential

Planning for an IPO goes beyond cashing in your shares. It’s about strategically aligning your decisions to help support your long-term financial well-being. Without proper planning:

• Taxes can affect the value of your payout.
• Holding onto too much company stock can increase financial risk.
• Lack of diversification can leave your wealth exposed to market shifts.

Working with a wealth manager early ensures you have a coordinated plan for taxes, equity compensation strategies, diversification and estate planning. At Aspiriant, we’ve guided employees through this process, helping them avoid common mistakes during an IPO and plan their financial futures.

Helping employees manage equity:

FAQs: Preparing for an IPO

Here are some of the most common questions we hear from employees preparing for their company’s IPO:

Key steps to prepare for your company’s IPO

We’ve helped numerous professionals navigate IPOs and use their wealth to achieve their personal goals and dreams. While each situation is unique, we’ve identified 10 steps for you to consider:

Step 1: Build your team of advisors for IPO success

It’s okay if you haven’t done this yet—starting now is what matters.

We get it. Planning for a liquidity event like an IPO can feel daunting. Taxes, cash flow, estate planning—it’s a lot to handle all at once. That’s why having a team in your corner can make all the difference.

Think of this team as your financial support system, there to guide you through the challenges and keep you focused on what really matters. Here’s who you’ll want on your side:

• A Wealth Manager: They’re your quarterback, coordinating the moving pieces of your financial life. They’ll help align your IPO strategy with your personal goals. Plus, they can guide you on how to manage your equity compensation after an IPO.
• An Investment Advisor: They’ll guide you in growing and protecting your wealth long after the IPO.
• An Estate Planning Attorney: They’ll ensure your assets are safeguarded and structured in a way that reflects your wishes.
• A Tax Advisor: Taxes can take a big bite out of your gains. A tax advisor helps you create tax strategies for IPO-related income, ensuring compliance while minimizing liabilities.

You don’t need to have all the answers—this team will help you find them. If you’re not sure where to start, Aspiriant can connect you with trusted professionals who align with your values and financial goals.

Aspiriant – An award-winning team

Step 2: Stay true to your values

It’s easy to lose focus in the rush of an IPO, but this is your moment to align your wealth with what matters most to you.

Wealth doesn’t define you—your values do. When the company you have shares with goes public, you might feel a rush of excitement or even a little anxiety about all the decisions ahead. That’s normal. The key is to stay grounded in what’s most important to you.

Take a step back and reflect:

• Do you want to prioritize financial security for yourself or your family?
• Are you passionate about giving back to your community or supporting causes you care about?
• Is this the time to create more space for personal goals, like traveling, learning something new or spending more time with loved ones?

When your financial plan reflects your values, every decision feels more intentional—and less stressful.

Step 3: Create a vision for your wealth

What does success look like to you? Start imagining it now.

An IPO can bring big changes, but the first step is deciding what you want those changes to look like. Maybe it’s buying a home, paying off debt or building a long-term safety net. Or maybe you’re dreaming even bigger—starting a charitable foundation, funding your children’s education or pursuing early retirement.

Your wealth manager can help you take those dreams and turn them into a clear, actionable plan. By defining your vision, you’re giving your wealth a purpose.

Step 4: Put a price tag on your vision

It’s not about the numbers—it’s about making your dreams achievable.

Once you’ve mapped out your goals, the next step is figuring out how much wealth you’ll need to make them a reality. This is your “number,” the amount of after-tax money you’ll need to fund the life you want.

For example, if your dream is to retire early and travel, your number might include funds to cover living expenses, travel costs and a diversified investment portfolio to help grow your wealth over time. Your wealth manager can work with you to calculate this number and develop a strategy tailored to your goals.

Step 5: Keep your eye on the calendar

Patience is key, but so is preparation.

An IPO timeline can feel like a hurry-up-and-wait situation. Between the lockup period (typically 90–180 days) and the complexities of securities laws, it’s not always clear when—or how—you can sell your shares.

This is where preparation pays off. Work with your wealth manager to develop a plan before the IPO happens. They can help you create a timeline for selling shares, balancing immediate financial needs with long-term goals like diversification and tax efficiency.

Step 6: Maximize tax strategies for IPO success

Taxes don’t have to take you by surprise.

Taxes are often the biggest hurdle in turning IPO equity into lasting wealth. But with effective tax strategies for RSUs and stock options during an IPO, you can better position yourself to reduce liabilities. Here’s how:

• Exercise ISOs strategically: Timing your option exercises carefully can help you reduce the Alternative Minimum Tax (AMT).
• Donate appreciated stock: If you plan to give back, donating shares to a donor-advised fund (DAF) can lower your taxable income.
• Spread stock sales: Selling shares over multiple years can prevent large tax spikes.
• Utilize different estate planning strategies: If one of your goals is to provide for the next generation or give to charities, using certain types of estate planning vehicles structure may allow you to avoid taxes now and in the future.

Step 7: Make or update your estate plan

Your wealth is your legacy—make sure it’s protected.

An IPO can dramatically change your financial situation, which means it’s the perfect time to revisit your estate plan. Update wills, trusts and property arrangements to ensure your wealth is protected and passed on according to your wishes.

This step isn’t just about addressing estate taxes; it’s about helping provide peace of mind that your family’s future is planned for.

Step 8: Protect your wealth and your identity

With great wealth comes greater responsibility.

Newfound wealth often attracts unwanted attention, from lawsuits to identity theft. Protecting your assets isn’t just smart—it’s essential.

Here’s what you can do:

• Strengthen insurance: Make sure you have adequate umbrella insurance to cover liability risks.
• Use trusts: Shield assets from creditors and maintain privacy.
• Secure online accounts: Strengthen your passwords and use multi-factor authentication to prevent fraud.

Step 9: Talk with trusted colleagues

Navigating an IPO is easier when you share the journey with trusted colleagues. While everyone’s financial situation is unique, comparing notes can help you identify questions to ask or strategies to consider. Talking with colleagues can also help you identify common mistakes employees make during an IPO and ways to avoid them.

Step 10: Set aside some fun money

Don’t forget to celebrate! Your hard work made this IPO possible. Whether it’s a special vacation, a new car or something else you’ve dreamed of, setting aside a portion of your earnings for fun is an important way to mark this milestone.

Turn your IPO into a financial launchpad

An IPO is more than a financial event—it’s a life-changing opportunity. With Aspiriant’s guidance as your quarterback, you can confidently navigate how to create a financial plan after your company’s IPO to support your long-term goals. Let’s talk about your goals and start planning.

Related Resources:

• Equity Compensation Guide: See how to manage your stock options and RSUs effectively, from understanding tax implications to creating a strategy that aligns with your financial goals.
• Navigating Liquidity Events: Key Insights for IPOs, M&As and Buyouts: This guides you through key decisions, tax strategies and wealth planning for liquidity events to maximize your financial outcome.
• Qualified Small Business Stock (QSBS): Understand the tax benefits of QSBS and how this special tax treatment could help you exclude significant capital gains on stock sales.
• Five Expensive Mistakes to Avoid Before & After a Liquidity Event: Avoid common pitfalls during IPOs and other liquidity events.
• What to Do with Stock Options: When to Exercise and Plan Taxes: Here, we help you understand the complexities of stock options, including when to exercise them and how to plan for taxes.