If your employer is the next SpaceX, Anthropic or OpenAI and is planning a splashy IPO, your company stock may feel like a winning lottery ticket. But equity compensation is not as simple as waiting for someone to read off your numbers. The choices employees make before and after an IPO can affect how much of that wealth they actually keep. And your biggest mistake may not be missing the peak stock price. It may be going into the event without a plan.
“Employees who tend to navigate IPOs best are the ones who prepare in advance,” says Steve Moyer, a certified financial planner and certified equity professional with Mariner, a wealth management firm. “One of the things that can happen is people react emotionally to sudden wealth rather than executing a thoughtful strategy.”
The changes can happen fast: SpaceX began trading on June 12, 2026; Anthropic and OpenAI have both filed initial paperwork with the SEC and may begin trading in the late summer or fall,.
Developing a plan takes time. There are details you need to gather, new concepts to wrap your head around and common traps to avoid. If you’re overwhelmed by the whole thing, consider finding a financial advisor who knows the ins and outs of going public. When the stakes are high, working with a qualified professional can be a relief.
What to do now: A pre-IPO checklist
- Gather your information. You’ll need to collect equity documents and stock-plan statements. Start by identifying what type of stock you own — incentive stock options, nonqualified stock options, restricted stock units, employee stock purchase plan shares or other common stock — as well as when it vests, what it costs to exercise, what it may be worth, how it would be taxed and when options expire.
- Learn your lockup and trading-window rules or other limitations. You won’t be allowed to sell your shares immediately. You can use the time to fine-tune your plan. But be aware that stock volatility could feel uncomfortable.
- Stay on top of taxes from your employee equity. Tax planning is critical for getting ahead of what you may owe so you’re not surprised. How much you'll owe on IPO stock depends on a number of factors, including how much was withheld when you sold shares.
- Decide how much stock you want to hold and draft a sell plan for the rest. You may want to keep some of the shares long-term because you believe in the company’s future. But selling some of your shares reduces the risk of having your net worth concentrated in a single stock.
- Revisit (or make) your financial plan. Optimizing your equity compensation strategy is great, but your decisions should also be anchored in your personal or family goals. What do you want your life to look like, and how could your company stock help get you there?
- Consider finding an advisor before decisions become urgent. A financial advisor can help you stay on top of all the moving parts, plus give you confidence you’re making smart money moves. The earlier you start working with one, the more complete your plan will be by the time the IPO happens.
Take stock of what you own
Employees may have multiple forms of equity compensation, and they all work a little differently. Most importantly, different types of equity compensation may follow different tax rules. And if you’re like some SpaceX, Anthropic or OpenAI employees, you may have more than one type of equity if your company has shifted from one instrument to another during your tenure. That’s why Moyer says his team’s first steps involve mapping out a client’s holdings. You may have, for example:
- Incentive stock options, or ISOs. These are stock options granted only to employees, who can then purchase a set quantity of company shares at a certain price. ISOs can have preferential tax treatment.
- Nonqualified stock options, or NSOs. These are stock options with fewer restrictions (and may have fewer tax perks). Companies can grant them to employees, as well as outside service providers, including advisors, board directors or other consultants.
- Restricted stock units, or RSUs. With these, you receive a specific number of company shares, subject to a vesting schedule and potentially other stipulations. Private companies sometimes have double-trigger RSUs, which means the shares do not transfer to you until after the company reaches a milestone, such as an IPO.
- ESPP shares. An employee stock purchase plan, or ESPP, allows employees to buy company stock at a discount. Typically, participants make contributions to the plan via payroll deductions. The ESPP holds the money until a specified purchase date, and then uses the money to purchase shares on employees’ behalf.
- Common shares from previously exercised options or vested awards.
You’ll need to review any documentation or statements to gather the important details of your options, units or shares, including when they vest, what they cost to exercise, what they may be worth, how they are taxed, when they expire and whether company rules limit when you can sell.
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Know when you can sell
You may have a few hurdles to clear before you can sell your shares.
- Tender offers, which are offers to buy a company’s shares, may occur before an IPO. This happened at Anthropic, for example, and it can be an opportunity to cash out, but it comes with tradeoffs, including potentially losing out on participating in a future IPO. In that situation, you’ll need a plan around whether you’ll participate, how many shares to sell and what the tax consequences would be.
- Lockup agreements prevent employees and other company insiders (including your friends and family) from selling their shares for a certain period after the IPO date. Typically, they last 180 days. Lockup agreements may also limit the number of shares you can sell over a given period of time. For example, an employee of SpaceX, which went public on June 12, may not be able to sell any of their equity until December if that equity is subject to a six-month lockup.
- Company trading windows are intended to guard against insider trading. Generally, they create periods during which employees can buy or sell company shares, as well as blackout periods when they can’t. For example, you may be barred from buying or selling shares in the weeks before your company’s quarterly earnings announcements.
- Restricted securities are often shares you acquired in a private transaction and may include shares you received through employee stock benefit plans or as compensation. You may have to meet specific resale requirements before you can sell these shares, even after an IPO. You’ll need to understand any holding-period requirements, filing requirements or limits on the number of shares you can sell.
- Liquidity requirements could be significant, as well. You may need cash to exercise stock options or cover taxes from an exercise or vesting event. For example, you may owe alternative minimum tax if you exercise incentive stock options, even if you haven’t sold the shares yet. (More on AMT below.)
You may experience a lot of emotions in those early days when you can’t sell your shares, especially if the stock price experiences volatility. That’s normal, and having a plan can help keep you calm.
“Until they can sell shares, there's nothing they can do,” Moyer says. “Part of the challenge is, you know, how do we help guide them through that process and reassure them that things are going to be okay?”
» Not an employee? Find the brokers that give you access to IPOs
Watch for tax surprises
Taxes are likely the biggest reason to make a plan before you act, Moyer says. “There's a lot of different moving parts and each has unique tax implications. So it's easy to miss something or just get caught off guard.”
Here’s what to look out for.
1. Different tax treatments
Here’s a look at how taxes generally work for RSUs and stock options.
Restricted stock units (RSUs) | Stock options | |
|---|---|---|
What are the typical stages? |
|
|
What is the value based on? | The market price. Because you don’t pay to acquire the shares, they’ll always have some value, unless the share price of your company goes to $0. | The bargain element — that is, the difference between the strike price and the market value of the shares at the time they’re exercised. Because you pay to acquire the shares, options are valuable when the strike price is lower than the market price. |
How are they taxed? | Usually, the market value of the vested shares is taxed as ordinary income. You may also be taxed on any capital gains when you sell. | ISOs: Typically, taxes are deferred until you sell your shares, though you may trigger the alternative minimum tax when you exercise. If you meet certain holding-period requirements when you sell, any profit from the sale may be taxed at the typically lower capital gains tax rate. NSOs: The bargain element is usually taxed as ordinary income. You may owe capital gains tax when you sell. |
When are taxes owed? | When the shares vest. This means employees don’t have the ability to time the tax event. You may also owe capital gains tax later if you sell the shares. | When you exercise your options. This means employees have some ability to time the tax event. You may also owe capital gains tax later if you sell the shares. |
2. Inadequate withholding
A common problem with RSUs is underwithholding taxes. When RSUs vest, the IRS treats the value of those shares as supplemental income. The default tax withholding rate is typically 22% in this situation (37% if all your supplemental income adds up to more than $1 million in a year). But the default rate may be too low for your personal tax situation, which means you could be in for a surprise tax bill later. “This can very quickly add up,” Moyer says. “We see six-figure tax surprises quite often.”
3. AMT
If you haven’t heard of alternative minimum tax, you’re not alone. “I’ve met with quite a few folks who’ve come to us because they exercised incentive stock options in a prior calendar year,” Moyer says. “And now they’re being told that they owe a lot of taxes because of AMT, and they didn’t even realize there was an AMT.”
AMT is a tax system that runs parallel to the standard tax system but has different tax rates and rules that are generally designed to ensure high earners pay a minimum amount in income taxes. For example, AMT limits certain breaks so that the tax bill is higher. AMT payers calculate their income tax twice — under regular tax rules and under AMT rules — and then pay the higher amount owed.
Like with every tax consideration, there are strategies you can use to avoid triggering AMT or otherwise reduce your tax burden. So just because it’s a possibility doesn’t make it a certainty.
» MORE: When to exercise stock options
Nerdy Perspective
How to choose an advisor who can handle an IPO
"I can’t write about a topic this complex without cautioning you: Don’t just go with the first advisor you see. Here are my tips for finding and choosing an advisor who will set you up for success."
- Ask your work friends. Getting a reference from someone who already has a good relationship with an advisor could give you a leg-up in finding a qualified person who’s familiar with your company’s plans.
- Check their relevant experience. “Financial advisor” is a general term that is not regulated. Anyone can legally use it, so always verify an advisor’s specific credentials and registration. Ask the advisor if they’ve helped clients through an IPO or tender offer before, as well as whether they regularly handle ISOs, nonqualified stock options, RSUs, ESPPs and concentrated stock positions.
- Follow up on fees. Financial advisor fees can be complicated, and you should always get a full picture of what you might pay to work with an advisor. But drill down on how the value of your shares might affect your fees. If the advisor’s fee is a percentage of your assets under management, ask whether unsold company shares count as assets under management and whether there are additional costs.
- Look for tax coordination, not just investment advice. A good plan requires a ton of tax work. Ask the advisor if they’ll coordinate with your CPA or help you find one who understands equity compensation. For that matter, an IPO-related windfall can trigger estate planning, insurance and other changes that may require help from specialists. You may consider hiring a financial team to cover every angle. If you don’t want to be the one managing the pieces yourself, ask whether your advisor will coordinate with your estate attorney, insurance broker or other financial professionals you work with.
» Want to compare advisors? Read our roundup of the best financial advisors, or use NerdWallet's search tool to find an advisor in your local area.
Decide how much company stock is enough
Having a significant portion of your net worth concentrated in a single stock can be risky. When that stock is the company that employs you, the risk can be even higher. If the business fails, you may lose your investment and your paycheck at the same time. Although you may want to keep some of the shares long-term because you believe in the firm’s future, it may also be smart to diversify your holdings so your whole financial picture doesn’t rely on the performance of one company.
Moyer says his team creates a sell plan even before all the IPO details are known. He asks clients to think through how much they would sell as soon as they’re allowed, how much they might sell over time and how much, if any, they want to hold long term. Then, as the IPO approaches, the planning becomes more granular. He pinpoints which shares to sell first, based on time held or their value; he also projects the tax liability and creates a timeline around lockups or blackout periods.
Use the IPO to update your broader financial plan
If parting with some of your shares feels hard, consider what you might want to do with the cash. Some money might go toward a short-term goal, such as a home purchase, vacation or tuition bill, for example. Some might go toward retirement savings, financial independence or another long-term goal. The point is, having a plan for the IPO dovetails beautifully with having a full-blown financial plan.
A comprehensive financial plan can cover your daily finances, debts, savings, investments, goals and other areas such as insurance and estate planning. Having these pieces in place and up-to-date is critical as your financial picture evolves.
“We're not going to just come in and recommend they sell company stock so that we can manage those investments,” Moyer says. “It all starts with their plan, their goals, their objectives, what they're trying to accomplish in life, what this wealth could potentially mean.”
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- 1.Anthropic. Anthropic confidentially submits draft S-1 to the SEC. Accessed Jun 18, 2026.
- 2.OpenAI. Confidential submission of draft S-1 to the SEC. Accessed Jun 18, 2026.
- 3.IRS.gov. IRS Publication 15. Accessed Jun 4, 2026.
- 4.IRS.gov. Topic no. 556, Alternative Minimum Tax. Accessed Jun 4, 2026.
