In the last two articles, we talked about the IPO process and your RSUs. The next step is to really understand what’s going to happen before, during, and after the IPO. Think of it as a treasure hunt where certain pieces of information are needed at specific points in time to understand your IPO situation.
Each piece is an exciting chapter that fits into a larger story, and builds to an exciting climax about you, your life, and your IPO.
The First Chapter of the IPO Situation
This is your chance to make a mint!
What do you own? How does it all work? This is uncovered in your RSU grant agreements and we can determine when you have true ownership of your shares (single or double trigger RSUs).
Additionally, you will find out how many shares you have now and what you will own in the future (company stock plan holdings report, vesting schedule, and RSU grant information)
Taxes are a Thorn in Your Side
As the IPO approaches and before you start counting how much you’re going to make, you have to be wary of the big, bad taxman. You could face a significant tax bill and you can prepare for his impact by gathering the following data.
Prior year tax returns and recent pay stubs.
We use them to understand your current circumstances, determine underwithholding taxes, and project what impact the public listing will have on your income and tax situation – what you will earn and what you are likely to owe.
The Payoff…And More
When the IPO is ready for launch how many shares do you own? After figuring out what shares go to the taxman, you will know how many shares you own free and clear.
This amount is your newfound prosperity! This is wonderful!!
Once the IPO is complete, there will be several months when you cannot sell any shares. When you can sell shares, how will you manage your company ownership? Instant payday? Wait for a certain dollar amount? Bet on a price increase? These answers all depend on what you want to achieve with your IPO situation.
Next week we will go over company share ownership and how to optimize your resources in order to avoid unnecessary missteps.