Before the IPO: Decisions to Make Before Your Company Goes Public 

August 1, 2026

An IPO can transform years of building a company into significant personal wealth. However, some of the most important financial decisions should be made well before the opening bell. 

For a founder or executive, preparing a company to go public can consume nearly every available hour. 

There are investors to meet, financials to prepare, regulatory requirements to navigate, and an organization to ready for life as a public company. Amid all that activity, it can be surprisingly easy to overlook another transition taking place at the same time: your personal financial life is about to change. 

An IPO can turn a highly illiquid ownership stake into significant personal wealth. But that transition does not happen all at once, and it does not necessarily mean that wealth is immediately accessible. 

The months and years leading up to an IPO can therefore represent an important planning window. 

The question is not simply what your shares may eventually be worth. It is whether your financial life is prepared for what happens if they are. 

Understand What You Actually Own 

Company equity can become increasingly complicated as a business grows. 

Founders and executives may hold common shares, restricted stock, restricted stock units, incentive stock options, nonqualified stock options, or other forms of equity compensation. Each can carry different vesting requirements, tax considerations, and restrictions. 

Before an IPO, it is important to understand not only the potential value of these holdings, but also the mechanics surrounding them. 

What is vested? What can be exercised? What restrictions apply? What happens at the IPO? When could shares eventually be sold? 

The headline valuation of a company and the amount of wealth personally available to an executive can be very different numbers. 

Understanding that distinction is an important starting point for everything that follows. 

Plan for Wealth That Is Still on Paper 

An IPO can create an unusual financial situation. 

Your net worth may increase dramatically while your available liquidity changes very little. 

Lockup agreements, company trading policies, securities laws, and other restrictions may limit when shares can be sold. Even after restrictions expire, selling a large position may require careful planning. 

That means a founder or executive can become significantly wealthier on paper without immediately having access to that wealth. 

Personal financial planning should account for that distinction. 

Cash reserves, upcoming expenses, debt, taxes, real estate purchases, family commitments, and other financial priorities should be evaluated based on liquidity that is actually available, not simply the value appearing on a balance sheet. 

Understand the Tax Implications Before Liquidity Arrives 

A significant liquidity event can introduce significant tax complexity. 

The type of equity owned, when it was acquired or exercised, its cost basis, holding period, and eventual sale price can all affect the outcome. State residency and other personal circumstances may add another layer of complexity. 

For executives with multiple forms of equity compensation, those considerations can become even more complicated. 

The important point is timing. 

Tax planning is generally more useful when it happens before decisions are made. Waiting until shares have been sold can substantially narrow the available choices. 

Working with tax, legal, and wealth advisors before the IPO can help identify potential consequences and evaluate strategies while there is still time to act. 

Revisit Your Estate Plan Before Your Wealth Changes 

A significant increase in company value can also change the scale of an estate, making it an important time to review and update the estate plan. 

An estate plan created years earlier may no longer reflect the assets involved, the owner’s intentions, or the complexity of the family’s financial life. 

For some founders and executives, the period before a liquidity event may provide opportunities to consider gifting, trusts, or other estate planning strategies involving company interests. Valuation, transfer restrictions, securities laws, tax rules, and the anticipated IPO can all affect what is appropriate and when. 

The objective should not be to transfer assets simply because an IPO may occur. 

It is to determine whether the wealth being created is ultimately intended for personal use, future generations, philanthropy, or some combination of the three, and whether the existing plan reflects those intentions. 

Think About Philanthropy Before Selling Shares 

For someone who already intends to give meaningfully to charity, appreciated company equity may create planning opportunities. 

Depending on the circumstances, contributing shares rather than selling them and donating cash can produce a different tax result. Donor-advised funds, private foundations, charitable trusts, and direct gifts may all warrant consideration depending on the individual’s objectives. 

Private-company shares can also introduce additional complexity around valuation, transferability, and the timing of a potential liquidity event. 

For that reason, charitable planning should begin with the philanthropic goal rather than the tax strategy. 

What causes or organizations do you want to support? How much wealth do you ultimately intend to give away? Do you want your family involved? 

Once those questions are answered, advisors can evaluate whether the period surrounding an IPO creates an appropriate opportunity to act. 

Decide How You Will Think About Concentration Before the Market Does It for You 

For years, concentrated ownership may have been exactly the right strategy. 

Founders create wealth by betting heavily on an idea, building a company around it, and retaining meaningful ownership as that company grows. Senior executives may similarly accumulate substantial company equity over the course of their careers. 

An IPO does not suddenly make that conviction irrational. 

It does, however, change the financial context. 

Once company equity represents a substantial portion of personal net worth and eventually becomes tradable, the owner must decide what role that position should play in their long-term financial plan. 

Those decisions can be particularly difficult after an IPO, when every movement in the share price creates a new reason to wait, sell, or reconsider. 

Developing a framework beforehand can help separate long-term planning from short-term market movements. 

Rather than asking what the stock might do next, the more useful question may be: How much of my financial future should continue to depend on this one company? 

Determine What the Wealth Is For 

An IPO can make the numbers bigger without making the answers clearer. 

Before liquidity arrives, it can be valuable to define what the wealth is intended to accomplish. 

Perhaps it means financial independence. 

Perhaps it creates the ability to purchase a home, invest in another company, support parents, fund children’s futures, establish a family foundation, or simply gain the freedom to decide what comes next. 

Different objectives require different levels of liquidity, investment risk, and planning. 

Without those priorities established, it can be easy to move from building a company directly into managing a large portfolio without ever determining what that portfolio is supposed to do. 

Prepare for Life After the Liquidity Event 

Going public can change more than a balance sheet. 

Founders and executives may suddenly find themselves making decisions they have never needed to make before. Family members may have questions or expectations. Estate planning becomes more consequential. New investment opportunities appear. Spending decisions that once felt significant can begin to look relatively small compared with newfound wealth. 

It can be helpful to establish some financial boundaries before that transition occurs. 

What changes after the IPO? What does not? 

What major decisions can wait? 

How much liquidity should remain readily available? 

What conversations need to happen with a spouse, partner, or children? 

Planning for the human side of a liquidity event can be just as important as preparing the portfolio. 

Build the Advisory Team Before You Need It 

An IPO sits at the intersection of several financial disciplines. 

Investment decisions can affect taxes. Tax decisions can affect estate planning. Estate strategies can affect ownership. Liquidity needs can influence investment decisions. Company restrictions can determine what is possible and when. 

No single advisor necessarily sees every part of that picture. 

Before an IPO, founders and executives may benefit from bringing together their wealth advisor, CPA, estate planning attorney, banker, and other relevant professionals to establish a coordinated strategy. 

Doing so early can be particularly valuable because the period surrounding an IPO often introduces deadlines, restrictions, and decisions that cannot simply be revisited later. 

Planning Before the Opening Bell 

Building a company valuable enough to go public can take years or decades. 

When that work ultimately creates significant personal wealth, there can be a temptation to postpone personal planning until the transaction is complete and the numbers are certain. 

But certainty often arrives after some of the most useful planning windows have begun to close. 

You do not need to know exactly what your shares will eventually be worth to begin preparing. 

You need to understand what you own, what opportunities and restrictions may lie ahead, what you want the wealth to accomplish, and who needs to be involved in the decisions. 

The IPO may be the moment the world recognizes the value that has been created. 

Your personal wealth strategy should not have to wait until then.

Trust, estate planning, insurance, and investment products are not a deposit, not FDIC insured, not insured by any federal government agency, not guaranteed, subject to investment risks, including possible loss of the principal amount invested and may go down in value. Any information and research contained herein do not represent a recommendation of investment advice to buy or sell stocks or any financial instrument nor is it intended as an endorsement of any security or investment, and it does not constitute an offer or solicitation to buy or sell any securities or investment services. This content is for informational purposes only and does not constitute legal or tax advice. Please consult your legal or tax advisor for specific guidance tailored to your situation. First Western Trust Bank cannot provide tax advice.