The IPO market is very sad right now.

It was not very long ago at all that IPOs were hot and everyone who worked at a large private company believed their company would surely go public in the next year, max two years. A belief that those private companies actively fed into.

Databricks. Stripe. Chime. Noom. Just to name a few.

And when everyone was so sure that their company was going public soon, they were also very interested in Doing Something with their stock compensation and personal finances to make sure the IPO went well for them.

But now, IPOs just aren’t happening. And there’s no sense of when they’ll resume happening. Not surprisingly, I’ve noticed that people are chit-chatting waaaaay less about their equity compensation now.

But I’m here to say: Now might be the best time to work on your finances.

(And yes, I’m fully aware of the conflict of interest I have in saying that. Doesn’t mean it’s not true.)

Coulda Woulda Shoulda.

I’m sure you have plenty of stories of this person or that who did the “smart” thing with their company stock last year when the stock price was way higher: sold in the tender offer, sold shares via the private secondary market, didn’t exercise options at sky-high valuations with the attendant tax bill.

Sure, maybe they were smart. 

It’s possible they were lucky. 

It’s also possible it’s all a lie. 

It’s even possible that these people are simply a small but vocal portion of the people you know and that most people are in exactly your same boat.

Bottom line: we do the best we can with the information we have at the time. And no one reliably predicted that the IPO market would dry up as fast as it did. 

(Yes, yes, plenty of people will claim now that they knew that, and some people certainly were warning against that. But there are enough people saying enough things all the time that someone has always said something. It remains that the overwhelming narrative last year was Go Go Go!)

Actually, even bottom-er line: What’s past is past. Sure, the best time to have planned your private-company stock strategy was three years ago. Second best time? Today.

Please don’t feel bad about whatever you did or didn’t do. This stuff is a noxious combination of incredibly complicated and “almost entirely subject to things outside your control.”

Now Is the Time.

Let me tell you a (very) short story:

In the leadup to Airbnb’s 2020 IPO, we here at Flow were inundated by potential clients desperate to find a financial planner. 

They wished they’d started planning for the IPO years earlier. 

Some wished they’d exercised options sooner. Others wished they’d figured out the rest of their financial life before having to make these decisions on The Biggest Financial Event Of Their Lives.

You know what Right Now is? “Years Earlier” for your company’s possible future IPO. Which is to say, now might be a particularly good time to actively plan for if your company goes public. 


For one, it could be cheaper to implement your strategies for your equity compensation now if private company stock prices start to fall.

Two, planning when you’re overly optimistic about your company’s future (as most people were last year) often leads to making…mmmmm…suboptimal decisions about your equity and then losing money. 

No one I know is particularly optimistic about IPOs right now. A little cynicism and pessimism is good for a reasonable financial plan!

Lastly, and perhaps most importantly, the last thing you need to be doing if your company is going public is figuring out everything else about your personal finances. 

Let’s say your company eventually does have a big liquidity event (IPO, tender offer, or acquisition). You tell me how you’d rather approach it:

  • Already understanding what you want in life and how your finances work. Confident that you’ve created a resilient financial life. Already knowing how this liquidity event could support your goals.


  • Not.

What to Do Now

You can’t control if or when your company goes IPO or has a tender offer. You can’t control whether the private secondary markets have an appetite for your private company stock.

What can you control?

Get the Rest of Your Finances Organized.

After we led many clients through the Airbnb IPO, we asked them for feedback on their experience working with us while going through the IPO. One of our clients said:

Answering this question with advice for younger selves! Find a financial planner WELL before the IPO. It was disorienting to try to do all the first year stuff: insurance, all the documents, taking stock of finances, etc while trying to manage the IPO / taxes. It has been hard to prioritize.

Now, part of that client’s overwhelm is absolutely on us. We could have done a better job triaging the stuff that absolutely had to happen now and what could have reasonably waited.

Our approach with that client was driven by our perspective that we can make the best decisions about the IPO (How many shares to sell and when? When to pay taxes and how much to withhold? How many options to exercise and when?) if we first fully understand the rest of their finances.

That theory is good, but doesn’t always play well with the reality of “we don’t have enough time!” 

That said, if you can work on your finances now so that that theory is your reality if/when your company IPOs, wouldn’t that be amazing? 

And bonus! Even if your company doesn’t ever IPO, you can still be confident that the rest of your finances are organized in a way that you understand, that makes you feel safe, and that supports the most important things in your life. 

Plan for Your Equity Compensation

It’s easy to see now that we shouldn’t have been so optimistic last year. But it remains that everyone was optimistic! 

Exercising and holding options. Not selling company stock during tender offers because they were sure the upcoming IPO would give them a better price.

Well, last year we shouldn’t have been as optimistic. Similarly, this year, maybe we shouldn’t be as pessimistic. Sure, pessimism could be warranted! It could also not be. 

You should make decisions that will be reasonable for you no matter what happens because, as it turns out, you don’t and can’t know what will happen. You didn’t and couldn’t last year. And don’t and can’t now.

So, what to do with your stock compensation in this environment of complete uncertainty (which is, to repeat myself, the environment we always live in, even if we don’t recognize that)?


You can sit around and lament that your RSUs are worth less nowadays, but other than that, there’s literally nothing to do. That’s the (mostly) good thing about RSUs. They just happen to you.

Most private companies grant you double-trigger RSUs, so you won’t even fully own the shares until your company goes public or gets acquired. Which means you can just forget about them for now.

Now, if you happen to work for a private company that gives you single-trigger RSUs, there are decisions to make about withholding for taxes versus paying taxes with cash. But honestly very few companies do this and it gets complicated real quick so I’m just going to gloss right over the rest of this.

Stock Options

The decision to exercise private-company options, or not, in any market and economic environment is the same, in my opinion:

  • What would it cost you to exercise?
  • What would happen to you if you lost all that money?
  • What would happen if you didn’t exercise and the stock became much more valuable later?

The only thing that’s different, as far as we can know, now from a year ago? Your confidence in your company. 

I have colleagues who are very knowledgeable about the VC/private equity/investment banking space. They can tell you all sorts of facts about finances for tech companies that I know nothing about. And they use that knowledge to develop opinions about whether or not it’s advisable to put money into your private company’s stock.

I have no such experience. I cannot give you such opinions. And I’m okay with that. Because, in my world, putting money into private company stock has always been an absolute gamble. It’s a matter of “You better be okay with losing all of this money.” That was my perspective a year ago. Two years ago. And today.

To first order, we’re all lemmings. Last year, everyone felt optimistic, we found all sorts of “logical reasons” for that optimism, so everyone felt optimistic. This year, everyone feels pessimistic, we find all sorts of “logical reasons” for that pessimism, so everyone feels pessimistics.

The only thing we can know is ourselves. Our finances. Our goals. Our values. That is what should be driving our decisions, not our expectations for the market. 

Let’s look at those questions above:

What would it cost you to exercise? The strike price is the same as always. The only other consideration with ISOs is that you might owe AMT (Alternative Minimum Tax) if the spread between the strike price and the 409(a)/fair market value of the stock is too high. And for NSOs, you will definitely owe ordinary income tax on that spread.

What would happen to you if you lost all that money? Would it prevent you from reaching a goal that’s really important to you? If yes, then, uh, maybe just hold on to your options. If no, then that gives you more space to consider risking your money by exercising your options.

What would happen if you didn’t exercise and the stock became much more valuable later? Would you lose the options entirely? If you lost the options entirely, would you still be able to have what’s truly important to you in your life? 

Would you have a bigger tax bill (because less of the stock price gain would be subject to a higher tax rate, rather than long-term capital gains tax rate, or hell, even QSBS treatment) but still have access to all the options? If you paid those bigger taxes, (this might sound familiar to you) would you still be able to have what’s truly important to you in your life?

I am happy for our clients and the rest of the folks who really benefited from their companies going IPO last year or before. At the same time, it was gettin’ A Little Crazy there for a while. And that energy scares me when it comes to making prudent financial decisions.

Hopefully the silver lining of the collapse of the IPO market is that it’ll remind us all that:

  • We shouldn’t rely on our companies going public.
  • If they do, we shouldn’t rely on the stock price going up. 
  • We can manage our finances in a way to create the life we want and support the values we care about without relying on a giant windfall that’s entirely out of our control!

Do you want to get your finances organized and create a plan for going forward, so that you can react confidently if/when your company goes IPO…eventually? Reach out and schedule a free consultation or send us an email.

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Disclaimer: This article is provided for educational, general information, and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. We encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Flow Financial Planning, LLC, and all rights are reserved. Read the full Disclaimer.

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