Monetizing Your Private Stock

the seller receives the purchase price so there is no opportunity for continuing gainStock in venture backed private companies is generally illiquid. In other words, there is a limited market for the stock since it is not freely transferable or publicly traded. Owners of common stock in private companies such as founders, employees, consultants, and others who wanted to obtain cash for their stock have traditionally either had to wait for a company liquidity event (for example, a sale or IPO of the company) or sell the shares on the secondary market. The problem with waiting for a liquidity eventRead More

The 83b Election Helps You Exercise Options Well In Advance

unvested assets don’t have to be recognized as income as a safety measure for you[/epq-quote]Venture-backed startup companies are big fans of using stock options as a major compensation tool to attract and retain employees. If your company’s stock value rises over the years, you can avoid two major tax issues by having exercised early. However, since you haven’t actually vested your stock and assuming your company even has an early exercise option, you would technically be holding restricted stock that is subject to repurchase by the company. The IRS allows that unvested assets don’t have to be recognized as incomeRead More