If you work at a company preparing to go public, you already know the feeling. For months, nearly every conversation has come back to one date: the day the stock starts trading. What will it price at? Will it pop? When can you sell? Many people at Anthropic and other AI companies are living through this right now, and if you are one of them, this post is for you.
Those questions are the beginning of a much longer set of decisions. The IPO is day one of a much longer stretch, and most of the decisions that will shape your wealth are still ahead of you. Where you stand years from now will likely depend less on how you handled the first week and more on whether you treated the IPO as the start of a plan.
The First Few Weeks Get All the Attention
The near-term questions are real. RSUs at many pre-IPO companies vest when the company goes public, which can create a large tax bill all at once, and the tax withheld at vesting often falls short of what a high earner actually owes. Lock-ups restrict when you can sell, and your shares can lose value while you wait. All of that deserves careful attention. And every one of those issues is the beginning of a process, with more decisions behind it.
Your Equity Keeps Arriving for Years
For most employees, the IPO does not settle their equity once and for all. Unvested grants continue to vest on their schedules, and new grants often follow. Every vesting date is a new tax event and a new decision about whether to hold or sell.
That turns equity planning into an annual process. Each year brings different income, a different share price, and a different tax picture. A sale that makes sense in a year with lower income may look very different in a year with a large vesting. Shares held for more than a year after they vest generally qualify for lower long-term capital gains rates, which means the timing of when you sell can matter as much as the price you get. Stock options add another layer, since ISOs and NSOs are taxed differently and ISOs can trigger the alternative minimum tax.
Concentration Does Not Fix Itself
After an IPO, most of an employee’s net worth is often tied to a single stock, while their salary and future grants depend on that same company. How much of that concentration to keep, and how quickly to change it, depends on factors such as your comfort with risk, your other assets, and the tax cost of selling.
Important considerations include how much of your net worth you are comfortable keeping in a single company, which shares would be sold first, how any sales line up with your income each year, and whether losses elsewhere in your portfolio could offset gains. These questions tend to come up again every year.
Your Life Will Change Faster Than Your Plan
Wealth that arrives quickly tends to bring big decisions with it. A home purchase that used to feel years away suddenly feels possible. Children’s education, support for parents, a career change, a sabbatical, or the option to stop working much earlier than planned all become real.
Each of those choices interacts with the others and with the equity. Leaving the company can affect unvested grants. A large liquidity need changes how much cash you need and when you need it. Funding education or helping family has tax consequences of its own. A plan built for the IPO reflects your life on IPO day, not the one you will be living a few years later. That is why a plan has to be revisited every time your life changes, not filed away once the lock-up ends.
Significant Wealth Changes the Planning
Once the numbers get large, the questions extend beyond investing. Estate planning becomes important, including whether gifts to children or trusts make sense and when to make them. Charitable giving can become a long-term strategy, with appreciated shares as one of the most useful tools. Insurance, liability protection, and asset titling all deserve a fresh look.
These decisions involve your CPA and estate attorney as much as your financial advisor. The value of a long-term advisor is keeping all of those pieces moving in the same direction, year after year, so that a tax decision does not undo an estate plan, or an investment change does not create a tax bill no one saw coming.
What a Long-Term Plan Looks Like
A plan that outlasts the lock-up tends to raise the same questions each year: what your tax picture looks like before the year ends, how much of your net worth is still in company stock, how upcoming vesting, cash needs, and life changes fit together, and whether your CPA, attorney, and advisor are working from the same picture.
The IPO is over in a day. The wealth it creates will be with you for decades, and so will the decisions that come with it. If you are at the start of that, we would welcome the chance to be the team you work with for the years that follow the first trade.
This post was written by Mauricio Galindo, MBA, Financial Analyst at Scholar Financial Advising. If you are preparing for an IPO, visit our IPO planning page or meet the Scholar team.