WRP Wealth Transfer Planning

The Road to Your IPO

It's a long, complex road to the finish line.

WRP’s IPO experts can guide you through each stage of the IPO process and help you make fully informed choices throughout your journey.


Select a numbered pin to learn more.

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Stock Options Received

After you receive options from your company, you have to decide whether and when to exercise them. As your company goes through fundraising rounds and a liquidity event seems more and more likely, the value of its stock can rise quickly. While you’ll want to exercise options when their value is still relatively low, it’s important to understand the tax implications of doing so. WRP can help you decide whether, when, and how to exercise your options as well as the tax liability that would result.

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Early Decisions

83(b) Election

After you exercise your stock options, you have 30 days in which to make an 83(b) election. Doing so makes your shares taxable at the time of granting rather than at the time of vesting. Assuming the value of your shares increases after they’re granted, making an 83(b) election can have the effect of lowering the amount of tax you owe. In some cases, however, making this election can result in tax overpayment. WRP can help you assess the risks and benefits of making an 83(b) election.


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Holding Periods

If you make an 83(b) election, this starts the clock on important holding periods that must be observed before you can take advantage of certain tax benefits. If you do not make an 83(b) election, these holding periods begin at the time you exercise your stock options and actually receive the stock.

One-Year Holding Period for Long-Term Capital Gains

This holding period is important because long-term capital gains are taxed at a significantly lower rate than short-term capital gains, which are treated the same as ordinary income. After the one-year holding period has elapsed and at least two years have passed since the grant date, you will get favorable long-term capital gains tax treatment on the sale of the underlying stock. WRP can help you determine the best time to sell stock to achieve an advantageous balance of profit and tax savings.


Five-Year Holding Period for QSBS

Qualified small business stock (QSBS) is stock in a domestic C corporation with less than $50 million in assets at and immediately after time of issue. If you hold QSBS for at least five years and during that time, the company uses at least 80% of its assets for business operations, then your capital gains on sale of the stock may be exempt from federal taxes. WRP can help you determine whether your shares qualify as QSBS and advise you on how to achieve the best tax treatment for your gains.

IPO Day marker Finish Line

Your company begins selling shares to the public. Typically, shareholders are barred from selling shares immediately after IPO. While this lock-up period is not mandated by the SEC, it is often imposed for six months in order to protect the value of a company’s stock.

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Post IPO

Lock-Up Period
After the lock-up period, managers and insiders can still be limited by trading windows. Establishing a 10b5-1 plan while not in possession of material non-public information allows such stockholders to make predetermined trades while avoiding any appearance of insider trading. If you’re eligible to participate in a 10b5-1 plan, WRP can help you set it up.


Repay Loans
If you took out a loan to exercise your stock options, you will need to repay it after the lock-up period expires. If you received additional shares during the loan period, then you may be able to deliver shares to the lender that have a different cost basis or tax treatment. WRP can help you determine the most beneficial way to repay such loans.

When you work with WRP, we’re there to guide you through every step of the IPO process and help you make the most of the rare opportunities that come your way

Download the Infographic

From the moment you receive stock options, decisions that you make—or neglect to make—can deeply impact your financial future. Learn about key milestones along the road to your company’s IPO and important issues you should consider as they draw near.