So, your company’s going through a cash acquisition, and you’re scared of the tax implications? And now you’ve got to figure out how to make the most of this acquisition… and how to not totally go under from the tax implications of it. We spend a lot of time talking about how to prepare for IPOs on this blog, but all cash acquisitions are very, very different. For one thing, they’re pretty much a one-time deal & it’s done. The acquiring company buys out all of your shares in one go, and that’s that. (Versus in an IPO when you might have one big initial cash-out, but your shares keep vestin ..read more

First of all, if you’ve got a double trigger RSU that are about to settle. Congratulations! You’re about to come into a lot of money. Just be tax aware and avoid being caught unprepared by a scary tax bill. (And also, good on you for reading this article & being smart enough to figure out what to do with your finances when this happens, because there will be tax implications… and being prepared is always better.) But before we get into planning WHAT to do, let’s take a step back so you can understand exactly what’s going on with your double trigger RSU settlement, and how that affects your ..read more

This is the second in a four-part series about your paystub – what the various deductions mean, why you need to pay attention to them, tips on not having too much or too little deducted, and how to use all that information in your financial planning. Our focus in part two is the stock and RSU offset on your paystub plus other equity comp items on your paycheck. In Part 1 I talked about the basic deductions that appear on most people’s paystub. In Part 2 I’ll cover some deductions that are specific to people with stock options and RSU. If you’re in the tech industry, chances are your employer h ..read more

Founders share tax can be confusing and tax mistakes are very expensive. Read ahead to learn how to avoid a huge tax bill if you are selling shares as a founder before an IPO. More than ever before, founders are taking their companies public with less equity in their companies than in the past. In recent IPOs, founders only had an average of 7% stake in their companies, which is less than half of what tech company founders have had in the past. It makes sense: Companies are choosing to stay private longer instead of going public. Sometimes, they want to stay private longer and do more private ..read more

Ahh, the golden handcuffs. Those lovely things that keep you chained to your current job until the IPO. They’re not so bad if your company is going to IPO in a year or two, but with more and more companies delaying their IPO, it puts startup and private company employees in a pickle. Here’s why: Stock options. A lot of times, startup employees aged 40 or less have most of their net worth tied up in the stock options their company gave them in exchange for working there. And they only get to “cash out” on those stock options when an IPO happens, because exercising them before an IPO can get qui ..read more

When you’ve got stock in a company, it’s normally a really, really good thing. Especially RSUs (or restricted stock units). They’re stock you get just by working in a company…. Ones you don’t even have to pay for. And any time those RSU shares “vest”—meaning the company hands ownership of them over to you—you become a wealthier individual. Cha-ching! ???? But then… of course… as is with any form of “income,” the IRS wants their share too. Which is why you so often hear the term “cost basis” associated with RSUs or simply RSU cost basis. Since you don’t actually have to pay for these shares, th ..read more

Navigating the financial landscape as a tech employee, particularly when dealing with stock options and IPOs, can be daunting. Understanding and strategically managing these assets can significantly impact your financial well-being. Here are five essential money lessons I got to share in this conversation with Christopher Nelson on Tech Equity and Money Talk that can help tech employees make informed financial decisions. What You’ll Learn in This Episode:​​ How to start shifting focus from paycheck to overall financial balance sheet Why you should be treating your career like an NFL contract ..read more

When you’re negotiating your compensation package, it’s easy to focus on the salary and maybe even the number of stock options you’re being offered. But how often do you consider the vesting schedule and how your equity accumulates over time? This is something I didn’t fully appreciate during my early career. Looking back at my negotiations from 2010 to 2012, I realize how critical it is to understand these elements, especially in today’s competitive job market. What You’ll Learn in This Episode:  Vesting Schedules: Know your company’s vesting schedule; it influences financial planning a ..read more

Knowing where to focus is the key to success on your journey of financial wellness. Something specific will trigger your decision to hire a financial advisor. What do I do with my stock options? I’m scared I will owe a ton in taxes. I want to buy a house. You must know where to start before you can address specific questions. Think of this as a financial wellness top ten. 1. Avoid Debt: The Foundation of Financial Wellness Mounting debt can choke your financial growth, much like smoking impacts your health. To lay the groundwork for wealth creation, sidestep high-interest obligations that be ..read more

Understand your 5 strategic options and select the best one for your financial plan. Incentive stock options (ISOs) are one of several types of equity compensation you may receive as a tech employee. Intended to retain key talent, incentive stock options give employees of a given company the right to buy company shares at a fixed price. Being granted ISOs is exciting but it’s merely the first step of a long, wealth-building process. Your next step is to devise an ISO exercise strategy to really set yourself up for success. The key is building a clear ISO exercise strategy that’s grounded in th ..read more