Stock Option and IPO Planning

Darrow Wealth Management regularly works with employees who have incentive stock options or nonqualified stock options. Through our ongoing advisory relationship, we can help you make a plan to exercise and diversify stock. If your employer is going public, merging, or getting bought out, work with an advisor experienced with strategic stock option planning and the tax implications.

If you’re expecting sudden wealth from a liquidity event or IPO, we’ll work to help you develop a strategy to make the most of the windfall.

Financial Advisor for Employee Stock Options

Especially for founders and early employees, stock options can create a major liquidity event that transforms your financial life. To maximize the opportunity, it’s critical to get the right team of advisors in place before making irreversible decisions with your shares.

Our team of stock option advisors can work to help you:

  • Plan for an IPO or acquisition
  • Understand the differences in equity compensation at a private company vs a public one, and planning opportunities therein
  • Discuss your goals to identify how to best utilize stock options in your financial plan or retirement plan
  • Develop an exercise strategy with an analysis to consider tax implications (like the alternative minimum tax) and risks of holding a concentrated stock position
  • Develop a liquidation strategy, factoring in risk, cash needs, and taxes and considering different grants
  • Coordinate the approach with your tax advisor and estate planning attorney
  • Decide on a strategy to best use the proceeds, including funding multiple goals and investment management services to help you diversify sudden wealth
  • Understand how vested and unvested stock options may be treated if you leave the company or retire
  • Explore cashless or sell-to-cover exercises of stock options
  • Implement a multi-year diversification strategy through an ongoing wealth management advisory relationship
  • Consider ways to further your charitable or legacy goals

 

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Financial advisor for IPO stock options

Meet the Advisory Team

The Darrow team has the financial, tax, legal, and investment acumen necessary to advise clients on a wide range of topics and potential situations.

Kristin McKenna, the firm’s Managing Director, is CERTIFIED FINANCIAL PLANNER™ professional with an MBA in Finance. John LeVangie is a Wealth Advisor and licensed attorney with an LLM in Taxation and background in estate planning. Michelle Wells is the firm’s Portfolio Manager and a Chartered Financial Analyst®. Learn more.

Wealth Management Services

Darrow Wealth Management is a fee-only financial advisory firm and full-time fiduciary. We regularly work with employees and executives with stock options, particularly after an IPO, acquisition, or direct listing.

By integrating financial planning with investment management, our goal is to help busy professionals build and grow their wealth.

More Than Money Management: Explore Financial Planning Capabilities

Nationally Recognized Wealth Manager

Kristin McKenna, CFP® is a Senior Contributor for Forbes and is often featured as a subject matter expert in national news media.

Boston

Stock Option Insights: From Acquisitions to IPOs

Qualified Small Business Stock - Section 1202
Business owners

Qualified Small Business Stock Gain Exclusion (Section 1202)

If you invested in a startup or small business (founders, employee exercise of stock options, business owner), you need to know about qualified small business stock. If eligible, you may be able to exclude up to 100% of the gain from federal taxes when you sell your shares. Qualified small…
financial advisor for executives
Stock options

When to Exercise Stock Options

When should you exercise stock options? With stock options, employees have the right (not obligation) to buy the shares (called exercising). Vesting is often the earliest employees can exercise, though early exercises are possible. If you stay with the company, you'll likely have 10 years from grant to buy the…
Tax law changes
Business owners

Expecting a Windfall from Stock Options or Selling a Business? New Tax Proposals May Cost You.

Tax planning for a sudden liquidity event just got more complicated. If you're expecting a big windfall from selling a business or employee stock options after an IPO or acquisition, you may be following the Build Back Better tax proposals. As currently drafted, the bill introduces new taxes on high…
Early exercise stock options
ISOs

What Does it Mean to Early Exercise Stock Options?

If you work for a private company or startup, you may be able to exercise your stock options early. With an early exercise, employees buy unvested stock options, as is common with restricted stock. Why would you want to pay for shares before they vest? In the right situations, early…