Preparing
for an IPO
An initial public offering is one of the most consequential financial events in an employee’s or founder’s career. Years of accumulated equity become publicly tradable, often representing a significant portion of a household’s net worth. The decisions made in the months before the IPO, and in the period immediately following, shape tax outcomes, concentration risk, and longer-term financial plans for years to come.
Much of the most valuable planning happens before the offering itself. Once shares are publicly tradable, the lockup period restricts when employees can sell, and several tax strategies are only available in the pre-IPO window.
Scholar Advising works with employees and founders approaching an IPO, as well as those who have recently been through one, to model the decisions in advance and build a plan that addresses tax exposure, concentration risk, and longer-term family priorities together.
The Current IPO Wave
IPOs happen in waves, and we are approaching one of the largest in recent history. SpaceX, Anthropic, OpenAI, and a number of other major private companies are positioned for public offerings or have recently completed significant liquidity events. For employees and founders at these companies, this wave is creating a substantial and concentrated set of financial decisions, often for the first time.
A single tender offer at one major AI company in late 2025, as reported by the Wall Street Journal, allowed more than 600 employees to collectively realize $6.6 billion, with roughly 75 of them reaching the $30 million per-employee cap. Public offerings of the largest private AI companies are expected to dwarf that scale. The result will be one of the largest creations of new private wealth in a generation, concentrated heavily among employees who may be navigating significant financial planning questions for the first time in their careers.
The planning decisions made in the months before an offering, particularly around tax strategy, concentration risk, and estate planning, shape outcomes for years afterward.
Planning Before the Offering
Every pre-IPO situation is different. Some employees hold a complex mix of ISOs, NSOs, and RSUs with years of grants behind them. Others are founders with significant unrealized gains and questions about how to position their equity before a public-market valuation.
We help clients understand what they actually hold and how each type of equity will be treated at IPO, model the tax consequences of early exercise, AMT exposure, and QSBS eligibility, and design a coordinated approach to charitable giving, gifting, and estate planning that often delivers the most value when implemented before the offering.
A Coordinated Approach
The months around an IPO involve decisions across tax, investment, estate, and liquidity planning, and the best outcomes come from considering them together rather than in isolation. We work alongside tax and legal professionals to coordinate 10b5-1 trading plans, lockup-period cash flow planning, and a multi-year strategy for reducing concentration responsibly once shares become tradable.
Whether you are preparing for an IPO twelve months from now or already on the other side of one, our role is to provide objective guidance that supports long-term financial independence for your family.
IPO Planning in Practice
Pre-IPO Planning: Building a Multi-Year Strategy Before the Company Goes Public
Current State of Finances
Aaron and Mira Goldstein, a married couple in their late 40s, are approaching a significant financial inflection point. Aaron is a senior executive at a private technology company that has confidentially filed for an initial public offering, with the listing expected within the next twelve to eighteen months.
Between his vested RSUs, exercised ISOs, and remaining unvested grants, Aaron’s equity position is currently valued at approximately $14 million at the company’s most recent 409A valuation, with the expectation that the public-market value will be materially higher. Mira runs a small consulting practice that generates a steady but modest income relative to Aaron’s compensation. Together, their household income sits above $600,000 before any equity events…
Conversations on IPO Planning
For deeper insight into how we approach IPO planning, explore relevant episodes of the Scholar Wealth Podcast.
Frequently Asked Questions About Preparing for an IPO
When should employees start planning for their company’s IPO?
The most valuable planning typically begins twelve to eighteen months before the expected offering. Several tax strategies, including early exercise of ISOs, qualified small business stock analysis, and gifting shares at private-company valuations, are only available or most effective in the pre-IPO window. Waiting until after the offering eliminates many of these options.
What is a pre-IPO lockup period?
A lockup period is a window of time, typically 90 to 180 days following an IPO, during which employees and insiders cannot sell their shares. The lockup creates a gap between the offering date and the first opportunity to generate liquidity, which is why cash flow planning and pre-IPO tax strategies matter as much as the post-IPO sale decisions themselves.
What is a 10b5-1 trading plan and why is it useful for IPO planning?
A 10b5-1 plan is a pre-scheduled trading arrangement that allows employees to sell shares on a set timetable, regardless of any material non-public information they may have at the time of sale. These plans are particularly useful for employees with ongoing access to confidential company information, and for removing emotional decision-making from sale timing. The plan must be established when the employee does not possess material non-public information, which is part of why establishing one well before the IPO is often the practical answer.
What is QSBS and how does it affect IPO planning?
Qualified small business stock, defined under Section 1202 of the Internal Revenue Code, may allow eligible shareholders to exclude a significant portion of federal capital gains tax on the sale of qualifying shares, subject to specific holding period and qualification rules. For founders and early employees of companies approaching an IPO, a QSBS analysis can identify whether shares may qualify and what holding period requirements apply. The analysis is most useful when conducted well before any potential sale.
How does an IPO affect estate planning?
The pre-IPO window is often one of the most effective times to revisit estate planning. Gifting shares to an irrevocable trust at private-company valuations, before a public-market step-up, can transfer significant value out of the taxable estate while using less of the lifetime gift exemption. These decisions interact with lifetime gift exemptions, trust structures, and family priorities, and are typically coordinated with estate planning counsel.
What’s Next?
Every engagement begins with a brief intake form so your advisory team can prepare ahead of time and align the conversation to your financial picture and goals. From there, you receive a tailored proposal built around your specific situation, walked through with you in detail so every question is answered before any commitment is made.