A pre-liquidity planning checklist for employees and executives
An IPO, tender offer or acquisition can turn illiquid equity into cash or tradable shares. The weeks before are often a useful time to organize information. This checklist is educational and does not suggest any particular action.
Organize your equity records
Gather grant agreements, vesting schedules, exercise records and any 83(b) elections. Confirm what happens to unvested equity in the event, which is usually defined in plan documents.
Understand the tax questions
Liquidity events can create large income or gains in one year. Questions often include how proceeds will be taxed, whether withholding will cover it and how state residency affects the outcome.
Plan for cash and timing
Lock-up periods may delay when shares can be sold after an IPO. Knowing the timing helps you plan for tax payments and any personal goals tied to the event.
What to gather
- Complete set of grant and exercise records
- Treatment of unvested equity in the event
- Expected tax and withholding
- Lock-up or holding periods
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Frequently asked questions
What is a lock-up period?
A period after an IPO during which insiders and employees typically cannot sell shares. Its length is set in the offering documents.
Is this equity compensation guide advice?
No. Sam's List writes these guides for education. They describe common questions and processes, not advice for your specific situation.
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