What You Should Know About Double-Trigger RSUs

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Maximize Your Retirement Savings with Professional 401k Management

Managing your 401k accounts effectively is crucial to securing a stable financial future. Many people either overlook their 401k accounts or leave them unmanaged, especially those from previous employers. This can result in missed opportunities for growth and ...

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The Importance of Diversification

Diversification is a key element of any investment strategy. By putting your investment dollars in a variety of assets, you can limit the risk of significant losses, reduce volatility in your portfolio, and take advantage of a wider array of opportunities, potentially ...

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Weighing the Advantages and Drawbacks of Investment Apps

With the rise of online investment tools, investing has become easier, more convenient, and more accessible than ever before. Today, a range of investment apps are available, allowing users to make trades quickly and seamlessly from their smartphones. While expanding ...

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How to Get Cash from Your Stock Without Selling at IPO

When you work for a startup, IPO is an immensely exciting time. Executives and employees who have been receiving equity compensation may be looking forward to IPO day in anticipation of a big payout. Typically, however, company insiders aren’t allowed to sell shares at ...

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Giving Back, Getting Back: Charitable Donations & Your Tax Return

Sharing your good fortune with others by donating to charities can generate a host of benefits. Not only can it spark that warm feeling inside of knowing that you’re making a difference; giving has also been shown to have the power to convey important health advantages ...

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What to Do When Your Company Stock Falls Below Its IPO Price

When you’re working for a startup and receiving equity compensation, hopes can run high at IPO time. Often, pre-IPO employees enjoy sizable boosts in their wealth after their companies go public. When things don’t go as planned, it can be hard to let go of the hope ...

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Exploring Stock Tenders & Their Impacts

A tender offer is an initiative by an individual, business, or corporate group to purchase a large quantity of non-public company stock. Initial investors and employees gain liquidity for their equities, making money available for other investments or expenses. By ...

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Maximizing Your Financial Potential: Understanding and Exercising Stock Options

Many companies provide stock options as equity compensation because they encourage employees to increase the value of their company through their work. It creates the potential for a tremendous win-win situation: employers benefit from an incentivized team that works ...

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ISOs vs. NSOs—What’s the Difference?

Incentive and non-qualified stock options (ISOs and NSOs) are two types of equity compensation that companies use to attract, incentivize, and retain top talent. Incentive stock options receive preferential tax treatment but come with limitations that don’t apply to ...

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What You Need to Know About GRATs

Grantor retained annuity trusts (GRATs) have become popular estate planning tools for wealthy families. Implemented properly, a GRAT can provide guaranteed income for the grantor and pass on wealth tax free to beneficiaries. In this article, we’ll look at how GRATs are ...

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Tax Implications of RSU Double-Trigger Acceleration

What are RSUs? Restricted stock units (RSUs) are a type of stock that companies often grant to employees as an incentive to remain with the company and contribute to its growth. Unlike stock options, which grant the right to purchase stock at a specified price, RSUs do ...

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Maximizing Employee Equity: Stripe's Early Liquidity Approach

When you have options or restricted shares in a private company, your equity compensation is in an uncertain state. You might anxiously await news of an anticipated IPO or SPAC acquisition and strategize how to pay the tax bill on your shares when it comes due, since ...

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How Is the Alternative Minimum Tax Calculated?

As a startup employee with options or shares in your company, you may be encountering the alternative minimum tax (AMT) for the first time. Before the AMT, many high-income filers could largely avoid federal income tax liability by taking a variety of deductions and ...

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Can a GRAT Help Me Pass More Wealth to My Heirs?

Grantor retained annuity trusts (GRATs) became popular after a 2000 ruling of the U.S. Tax Court in favor of the Walton family (Audrey J. Walton V. Commissioner of Internal Revenue), which upheld the family’s use of two such trusts to avoid the gift tax. GRATS are now ...

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Zoom—An IPO Done Right?

Outstanding Returns for Pre-IPO Investors The Zoom IPO is an example of a pre-IPO shareholder’s dream. After first announcing an opening share price in the range of $28–$32, the company announced a revised initial offering price of $36 the day before public trading ...

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IPO vs. Direct Listing vs. Tender Offer

If your company is about to undergo a liquidity event, congratulations! While many companies achieve this milestone by going through the IPO process, an IPO isn’t the only way to get there. Your company may reach public equities markets through a SPAC acquisition or ...

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What to Expect when You're Expecting (an IPO)

If you receive equity compensation in your pre-IPO company, you have several important decisions to make before IPO day. In this article, we’ll walk you through various stages of the IPO process and what you need to know at each step to get the most out of your options ...

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Non-IPO Stock Options Liquidity Opportunities

When you acquire stock options from your pre-IPO employer, your liquidity is severely limited. The most common ways executives and employees are able to sell their private company shares is through IPO, SPAC acquisition, or direct listing on a public exchange. However, ...

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Preparing for a Liquidity Event? Ask These 4 Key Questions.

As your company’s public offering date approaches, preparation is everything. To take full advantage of this rare financial opportunity, it’s critical to understand exactly what type of options and/or equity you have, the tax implications they carry, and when you’ll be ...

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Making Donations of Company Stock

Many Americans who can comfortably do so include regular charitable giving in their financial planning strategy. If your goals include helping charities that support causes you care about, it’s important to understand that how you give can have just as much impact as ...

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What Should I Know About Qualified Small Business Stock (QSBS)?

Qualified small business stock (QSBS) is a type of investment that gained special tax treatment in 1993 as part of the Revenue Reconciliation Act. The move was intended to incentivize investment in small businesses. Since its introduction, however, Section 1202 of the ...

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Year-End Planning: Key Items For Your Stock Comp Checklist

When you acquire stock options from your pre-IPO employer, your liquidity is severely limited. The most common ways executives and employees are able to sell their private company shares is through IPO, SPAC acquisition, or direct listing on a public exchange. However, ...

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What To Do After You've Sold Stock in Your Company

Now that you’ve sold stock in your company, careful planning is necessary to make the most of your gains so they can support your highest goals. This includes protecting your gains, wisely managing your remaining investments, and maintaining awareness of ever-changing ...

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What Should I Know Before Selling My Stock?

Stock in your rising company can present a once-in-a-lifetime opportunity to build wealth. To make the most of it, however, it’s important to understand the nuances involved in buying, selling, and tax planning. Once you’re holding vested shares, you face important ...

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What Pre-IPO Employees Should Know About the Alternative Minimum Tax (AMT)

What is Alternative Minimum Tax? The alternative minimum tax (AMT) is a provision of the tax code designed to obligate high-income taxpayers to pay at least a minimum amount of tax. When the AMT is triggered, a taxpayer must calculate their taxable income twice: once ...

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Are RSUs Stagnating Your Portfolio Potential?

One question that executives and employees frequently pose during the portfolio planning process is related to RSU shares: Should I leave my RSU shares as they are, or is now the right time to sell? They may also ask whether it’s wise for anyone to sell off financial ...

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Stock Option Strategies for Navigating Downturn

When the market turns bearish, investors want to know how they can best protect their assets and secure their financial future. It’s always important to keep in mind certain fundamentals, such as the cyclical nature of the market and the importance of diversification, ...

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What to Do If Your IPO Is Delayed

Volatile economic conditions are having a big impact on startups. Inflation and market declines have spurred many companies to cut costs in a variety of ways. In addition to hiring freezes, layoffs, and consolidations, some companies are delaying their IPO dates in the ...

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What Happens to My Stock Options If I'm Laid Off?

The turbulent economy is impacting the way startups do business. The bear market, steep inflation, and global volatility have many companies instituting a variety of cost-cutting measures, such as consolidations, IPO delays, hiring freezes, and layoffs. If you’re among ...

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Tips for Staying on Course During a Market Downturn

Many investors are nervous. Even when you understand that unpredictable ups and downs are a persistent feature of the market, volatility like this can make it seem like the sky is falling. Especially when markets are down and prices are rising, however, it’s critical ...

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Preparing for a SPAC Acquisition vs. Preparing for an IPO

If your company is planning to go public, you have a lot of preparation to do. You’ll need to decide whether and how much to invest in your company before its public offering and understand the potential tax consequences of the decisions you make. The two ways ...

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The Pre-IPO Timeline & Process of Going Public

Because it can take anywhere from six months to two years for a company to complete the pre-IPO process, your company’s big day may seem a long way off. Once you’re aware of the plan to go public, however, you have no time to waste. Here are some key considerations to ...

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What You Should Know Before IPO

If you’re a startup founder, executive, or employee, your company’s IPO might be your first experience with managing wealth. While an influx of cash is certainly a blessing, it also brings new challenges into your life. What you do the year leading up to IPO day can ...

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Will I Owe Taxes When My Company Goes Public?

For employees who own equity in their companies, the approach of IPO day is filled with excitement. Along with the possibility of newfound wealth, however, comes the prospect of a sizeable tax bill. If your company is on the path to public offering, you may be ...

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3 (More) Essential Questions About 83(b) Elections

In part one of this two-part series, we reviewed how an 83(b) election works, how it can reduce taxable income, and the potential drawbacks of filing the election. In part two, we’ll look more closely at how 83(b) applies (or doesn’t apply) to different types of equity ...

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5 Ways to Maximize Restricted Stock Units (RSUs)

If your company is headed toward public offering, whether through IPO, SPAC, or direct listing, it’s likely you’re wondering how you can make the most of your equity compensation. While this can take several different forms, this article will specifically examine the ...

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Your Stock Options Are Like Avocados, Part 5 - Don't Let Your Avocados Rot on the Shelf!

Peak ripeness can be elusive. When you buy avocados, it’s often for a specific purpose. Maybe you’re planning to have fajitas for dinner this week or make guacamole for a party. If you start worrying about whether the avocados are at the peak of their ripeness, ...

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Your Stock Options Are Like Avocados, Part 4 - Leverage More Trees to Make More Guacamole!

In the first three parts of this series, we used an avocado analogy to discuss when it’s time to exercise your stock options (pick the avocados), what it takes to be ready to sell your shares (make guacamole), and how to keep more of that guacamole for yourself and ...

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Your Stock Options Are Like Avocados, Part 3 - Don’t Give Away Too Much Guac!

In parts 1 and 2 of our analogy between stock options and avocados, we discussed the importance of understanding when your stock options are ready to pick (exercise) and your shares ready to slice (sell) depending on what type you have (ISOs or NSOs). In this ...

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Your Stock Options Are Like Avocados, Part 2 - Are You Ready to Make Guacamole?

It’s common for startup executives to plan to sell shares to cover major expenses such as taxes that are due for the previous year’s options exercise, a child’s college tuition, or buy a new home. While this can be a useful strategy, it’s essential to plan your share ...

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Your Stock Options Are Like Avocados, Part 1 - Let Them Ripen!

Amazing guacamole comes from knowhow. As any amateur dip maker can tell you, the key to great guacamole is great avocados. Picking the right avocados from the market is an art as much as a science. When it comes to your stock options understanding when your options ...

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Pre-IPO Planning Checklist

If your company is preparing to go public, whether through IPO, SPAC, or direct listing, you have a lot of decisions to make leading up to the big day. The choices you make in the coming weeks and months will have a lasting impact on your long-term financial future. ...

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The Importance of Pre-IPO Financial Goal Setting

If you’re working at a pre-IPO company, tremendous financial opportunities may be on your horizon. You may have big dreams about what you can do with your anticipated windfall, but without clear financial goals and proper structures in place to reach them, those dreams ...

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Common Questions About 10b5-1 Trading Plans

Your company’s public offering can bring tremendous financial opportunities. Making the most of them requires careful planning. However, as an employee, blackout periods and concerns about insider trading hang over your decisions about when to buy or sell your company ...

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Principles of Conscious ESG Investing

As the prospect of your company’s IPO becomes more real, you have many decisions to make about how to invest your newfound wealth. ESG investing can help you pay your good fortune forward by supporting businesses that are making positive change in the world. Done ...

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3 Essential Questions About 83(b) Elections

As your company approaches IPO, you have a lot of important decisions to make. If you’ve received stock options or a restricted stock award, you may be able to take advantage of Internal Revenue Code Section 83(b). Under certain circumstances, this provision allows ...

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How to Keep Your Taxes Under Control in an IPO Year

The time leading up to your company’s IPO or SPAC merger can be intensely exciting and, at times, overwhelming. A debut on the public market often marks a steep increase in income for employees. This new influx of wealth, however, requires a new level of tax planning. ...

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What Do I Need to Know About Post-IPO Financial Planning?

If your company is exploring options for going public, whether via an IPO or SPAC merger, making the most of the opportunity requires specialized knowledge and careful planning. A fiduciary financial advisor with expertise in the IPO process is a key ally during this ...

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When Can I Sell My Company Shares?

If you own pre-IPO shares in your company, you will most likely be subject to a lockup period immediately following its IPO. A lockup period is a window during which company insiders like employees and executives are prohibited from selling their shares. Typically ...

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Financial Planning Tips for After Your Company Files Its S-1

Now that your company has filed its S-1 with the SEC, you have many decisions to make that can be tremendously consequential to your financial future. This can be overwhelming, especially considering that this is likely to be a very busy time within your company as the ...

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How Do Companies Benefit During an IPO?

Why do companies undertake an IPO? An IPO can be a powerful way for a company to fuel growth. By offering shares to public investors, a company gains the ability to raise large amounts of interest-free capital. Completing the IPO process also bolsters the company’s ...

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How Do You Know If Your Financial Advisor Is Working for You?

As your company prepares to go public, it’s important to get the very best financial advice to make the most of this rare opportunity. The right experienced, trustworthy financial professional can keep you aware of important deadlines, tax rules, and other details that ...

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6 Tips for Reviewing Your 401(k)

To ensure that you remain on track to meet your retirement goals, you must regularly review the investments in your 401(k) or other retirement account. Regular review enables you to make necessary adjustments to your portfolio as your means, needs, goals, and the value ...

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What to Know About Your Employee Stock Purchase Plan

If your employer offers an employee stock purchase plan (ESPP), it’s important to understand how it works and how owning stock in your company can best support your long-term financial goals. Before you decide whether to participate and, if so, how much to invest in ...

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Why Are SPACs So Popular Right Now?

Special purpose acquisition companies, commonly known as SPACs, have been around for decades but began to soar in popularity in 2020. 2021 is seeing even more activity by SPACs, which raised more money in the first three months of this year than in all of 2020. In ...

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5 Tips for IPO Early Decisions
5 Tips for IPO Early Decisions

Your company has announced its plans for IPO. Whether your company has just filed its S-1 or you just received your C round of funding, this is an exciting time full of hard work and the prospect of rich reward. While the big day might still be a while off, you have no ...

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What Should I Consider Before Donating to a Foreign Charity?

Charitable contributions to benefit causes overseas can make a tremendous impact on people’s lives around the world. In fact, GiveWell.org estimates that while it costs more than $100,000 to provide a child twelve years of education in New York City, just $3,000–$5,000 ...

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What Is the Benefit of an 83(b) Election?

What is an 83(b) election? When you file an 83(b) election, you’re taking advantage of section 83(b) of the Internal Revenue Code (IRC). This provision allows early investors in a company, including employees receiving equity compensation, to calculate and pay tax on ...

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What Does It Mean to Exercise a Stock Option?

Stock options are a form of compensation that many startups and other companies offer their employees and other key players in the company. A stock option is a contract in which the company issuing the stock grants the right to purchase a certain number of shares at a ...

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How to File an 83(b) Election for Restricted Stock Grants

What is an 83(b) election? An 83(b) election is a way to potentially limit your tax liability for gains on shares of company stock. It allows you to pay taxes on shares before they vest, when their value may be still relatively low. You may choose to file an 83(b) ...

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How are Restricted Stock Awards and Restricted Stock Units Taxed?

Restricted stock awards (RSAs) and restricted stock units (RSUs) are two types of incentive programs that are common in startup companies. While similar, there are some key differences in how these benefits are delivered and taxed. Both require careful tax and ...

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SPAC vs. IPO: What's the Difference?

Your company is going public. Whether that happens via a SPAC or the traditional IPO process, you have several important decisions to make in the near future. There are some key differences between the two processes, however, that can affect how you manage your stock ...

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What You Should Know About the IPO Lockup Period

If you have pre-IPO shares of your company’s stock, you may be wondering when you’ll be able to cash in. Here are the basics you should know about the IPO lockup period and the importance of planning ahead for share sales. What is an IPO lockup period? A lockup period ...

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Is It Time to Review Your 401K?

To stay on track to meet your retirement goals, it’s important to make a regular habit of reviewing your 401(k) portfolio. This helps ensure that you’re putting enough aside and that you have the best mix of investments to meet your financial objectives. If you haven’t ...

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5 Tips for Early Exercise of Stock Options

Many companies that offer stock options as part of their compensation packages allow employees to exercise those options before they vest. This practice is known as early exercise, and many employees in pre-IPO companies have successfully used it to avoid hefty tax ...

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3 Reasons You Need a Wealth Management Plan After Your Company’s IPO

Congratulations, your company has finally gone public! At this essential turning point in your financial journey, it’s important to reassess your financial goals and priorities through the lens of your new circumstances. Seeking advice from experienced and trusted ...

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Active Tax Loss Harvesting: The Great Reappearing Alpha

Alpha is elusive. Some advisors claim they’ve achieved it, only to have it slip through their fingers. Many of the most prestigious investment firms have spent billions developing algorithms trying to track it down. When alpha appears, it comes down to fractions of a ...

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How Does an Employee Stock Purchase Plan Work?

If your company offers an employee stock purchase plan (ESPP), it could provide a path to future wealth. Like any investment, however, participating in an ESPP carries risk. Before signing up, you should understand how an ESPP works, the specific provisions of the plan ...

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What Is a Grantor Retained Annuity Trust (GRAT)?

A grantor retained annuity trust (GRAT) can allow you to avoid large amounts of gift or estate tax while transferring high-value investments to the next generation. Changing Estate Tax Law While most families don’t have to worry about estate taxes, they can put a ...

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The Basics of Converting ISOs to NSOs

We've previously explained the benefits of ISOs and how they differ from NSOs, but there is still an important concept to discuss. When ISOs are exercised and held for one year (two years from the grant date), the gain receives capital gain treatment, while NSO gains ...

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How Is Coronavirus Affecting Upcoming IPOs?

The sudden onset of a global pandemic has shaken up economies around the world. When COVID-19 tightened its grip in February and March, markets plunged deeply, dashing—or at least delaying—the hopes of many investors who had anticipated public offerings this year. What ...

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What Is a SPAC?

Often referred to as “blank check companies,” special purpose acquisition companies (SPACs) have been around for decades. Typically created by investors with specific expertise in a particular industry or market sector, a SPAC is a company whose sole purpose is to ...

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What the Hell Is Going On with the Stock Market?

COVID-19 hit the stock market hard. A little over six months ago, WRP held a webinar for all our clients to discuss the state of the market. It was bleak indeed. COVID-19 was raging all over the world, and many places had commenced shutting down. It got worse. On March ...

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The Essentials to Early Exercise of Stock Options

The most exciting (and uncertain) time to be in a company is the beginning. With little in the way of pay and much in the way of work, companies have to get creative when it comes to compensating their employees. This is why those who join early with a startup often ...

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Is a Long-Short Fund Right for You?

As we enter the second half of 2020, many investors have turned to alternative assets to protect them from the economic downturn. No one likes to lose money, and Warren Buffet (Founder of Berkshire Hathaway) said, “The goal is simply to survive the disaster with the ...

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Intrinsic vs. Time Value of Stocks

Nothing hinders a good decision like greed. While there is nothing wrong with setting goals to earn more in life—which is an idea our entire economy is built upon—when greed grabs hold, we often make bad decisions that can ultimately destroy our long-term success. It’s ...

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5 Ways to Take Advantage of an Economic Recovery

While COVID-19 is going to be here with us for some time, the economic recovery seems to be underway. Of course, there are no guarantees, and should deaths spike suddenly the bottom could be upcoming rather than in the rearview mirror. Whether we’re at the bottom or ...

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5 Steps to an Effective COVID Portfolio

We’ve all been impacted by COVID-19. We have learned a lot about the virus, ourselves, and our economy over the last couple of months, but there is still a lot that remains unknown. While we can be certain that as our society opens back up there will be an increase in ...

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CRTs: The Mr. Hyde of Charitable Trusts

In a previous blog post, we discussed how charitable lead trusts (CLTs) could be used to gain a large tax deduction, offset other capital gains, and fund philanthropic interests. However, that is just one side of the charitable trust world; charitable remainder trusts ...

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Using Charitable Trusts with Stock Options

The numbers don’t lie: Americans are very charitably inclined people. The U.S. has ranked at the top for charitable giving over every country for the last 10 years. So, it should come as no surprise that a number of our clients have participated or plan on ...

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5 Ways to Set Yourself Up for Success When the Stock Market Rebounds

What to do with your stock options when the market is in the preverbal toilet? Nobody likes stock market declines. From 401ks to 529s, a bear market is hazardous to one’s wealth. However, there are five things that you can do to set yourself up for success when the ...

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What You Should Know About Double-Trigger RSUs

In the nascent days of a startup, stock options are the norm. Early employees can expect access to incentive stock options (ISOs), and non-qualified stock options (NSOs), which are leveraged type options that can make someone very wealthy, very quickly. But as a ...

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ISOs – The Importance of 83(b) Pt. 3

In Part I of “The Importance of 83(b),” we conducted a survey of the 83(b) election and discussed in what context the election made sense when it came to restricted stock awards (RSAs). In Part II, we looked at examples of 83(b) elections for RSAs. Now, in Part III, ...

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Liquidity for Startups Pt. 2: Secondary Market Sales

In Part I of our discussion about liquidity for startup employees, we looked at liquidity options that a company may provide for employees with illiquid stock—specifically tender offers and stock buybacks. In Part II, we’ll discuss one option that the employee can take ...

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An Introduction to Stock Options and Taxes

As the number of startups hit new heights in the Silicon Valley and various companies are utilizing equity to help attract, retain, and motivate skilled workers, the term “incentive stock option” is becoming more common in employment contracts. Although many will use ...

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RSA Examples – The Importance of 83(b) Pt. 2

In Part I of “The Importance of 83(b),” we shared a survey of the 83(b) election, and discussed in what context the election made sense when it came to restricted stock awards (RSAs). In this post, we are going to go through some examples of what can be accomplished ...

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Liquidity for Startups Pt. 1: Tender Offers & Stock Buybacks

If you work for a late stage startup, you are most likely suffering from both mental and physical fatigue. You’ve worked for many years with the expectation of a big payout from your stock options, but the company doesn’t seem in any rush to go public. “Unicorns” ...

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ISOs Pt. 1 – Stock Options and Taxes

As we sign on the dotted line and say yes to a job offer, many of us do not completely comprehend the full effect of what we are signing. Aside from income tax on the base salary, we often overlook the tax consequences caused by the other big variable—stock ...

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RSAs – The Importance of 83(b) Pt. 1

Most people have heard of the famous Internal Revenue Code sections 401(k), 403(b), 121, and 1031, yet there are a few that tend to slip under the radar for most taxpayers. One code section that has a meaningful impact on a taxpayer’s return is 83(b). What is 83(b)? At ...

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