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.
Outside the company stock, the Goldsteins own their primary residence, hold roughly $1.8 million across 401(k) and brokerage accounts, and have begun thinking about how to fund education for their two teenage children. They have not yet completed any meaningful estate planning beyond basic wills.
For most of Aaron’s career, his financial strategy has been straightforward: hold the equity, exercise when it made sense, and let the position grow. Now, with a public offering on the horizon, the questions are more complex. How much of the position should be sold once the lockup expires, and over what timeframe? Are there tax strategies available now that disappear after the IPO? How should the family think about estate planning before a public-market valuation changes the math?
The Goldsteins reached out because they wanted to start planning well before the offering, while the most valuable options were still on the table.
Financial Advisor Insights: What are we thinking about?
Taking Inventory Before the Offering
The first step is building a complete picture of what Aaron actually holds.
Pre-IPO equity often accumulates in layers over years, and each layer behaves differently at the offering. We map out his vested and unvested RSUs, his exercised and unexercised ISOs, the grant dates and strike prices on each tranche, and the vesting schedules that will continue through and after the IPO.
That inventory becomes the foundation for every other decision. It tells us where the AMT exposure sits, which shares may qualify for long-term capital gains treatment at IPO, and which grants are worth exercising now versus later.
Modeling Tax Strategies Available Only Before the IPO
Several of the most valuable tax strategies must be implemented before the offering, or they disappear.
We model the tax consequences of exercising Aaron’s remaining ISOs at current 409A valuations rather than waiting for the public-market price, including the alternative minimum tax exposure that comes with that decision. We evaluate whether any of his earliest shares may qualify for the federal capital gains exclusion under Section 1202, which can be significant for founders and early employees of qualifying companies. We also coordinate with Aaron’s tax professional to plan the timing of exercises and sales so they fit within a multi-year strategy rather than concentrating the tax impact in a single year.
The goal is not minimizing this year’s tax bill in isolation, but shaping the next several years so the family keeps more of what Aaron has built.
Planning Around the Lockup and Concentration Risk
Once the company goes public, Aaron will face a lockup period of 90 to 180 days during which his shares cannot be sold. After that, the central question becomes how quickly and through what mechanism the family reduces its concentration in a single stock.
We design a 10b5-1 trading plan that Aaron can put in place well before the IPO, when establishing the plan is procedurally cleaner. The plan schedules sales over a multi-year horizon, removes the emotional component of timing decisions, and provides a framework for the family’s cash needs through tax season and beyond.
Alongside the trading plan, we build a diversification strategy that gradually moves proceeds into a portfolio reflecting the Goldsteins’ long-term goals rather than their last employer’s stock price.
Coordinating Estate and Charitable Planning
A pre-IPO window is often the right time to revisit estate planning, particularly for families that have not yet done meaningful work in this area.
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. Working alongside the Goldsteins’ estate planning counsel, we model how trust structures might fit their goals for their two children and their longer-term family priorities.
If the Goldsteins are charitably inclined, the IPO year is also one of the most effective times to fund a donor-advised fund with appreciated stock. Contributions made in a high-income year can offset some of the tax impact of the offering while creating a vehicle for charitable giving over the years to come.
Our role is to bring these conversations together, so the decisions Aaron and Mira make in the months before the IPO continue to support their family’s financial independence for decades after it.
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.