Your company just announced it's going public. Or a tender offer. Or an acquisition.
After years of holding equity compensation—ISOs, NSOs, RSUs, or founder shares—you're finally about to turn paper wealth into real money.
This moment is called a liquidity event. And for most people, it's one of the most financially significant milestones they'll ever experience.
But here's what almost no one tells you: the liquidity event itself isn't the finish line. It's the starting point for the most important financial decisions you'll make.
Because having wealth and managing wealth are two completely different things. And without a strategy, liquidity can become a missed opportunity for some individuals instead of a foundation for long-term security.
This is the first post in our comprehensive Liquidity Event Series—a step-by-step guide to understanding major milestones in your equity journey, from pre-IPO planning through considerations related to long-term financial sustainability.
What Exactly Is a Liquidity Event?
A liquidity event is when you gain the ability to convert illiquid equity—stock options, restricted stock, or founder shares—into cash or publicly tradable stock.
The most common triggers include:
An Initial Public Offering (IPO) Your company lists on a public exchange, and your shares become tradable (typically after a 6-month lockup period).
A Tender Offer or Secondary Sale While still private, your company allows employees or early investors to sell a portion of their shares to outside buyers—usually institutional investors.
A Company Acquisition (M&A) Your company is acquired, and your equity converts to cash, stock in the acquiring company, or a combination of both.
Each scenario creates an opportunity—but also a new set of questions:
- How much should I sell?
- How much tax will I owe?
- What should I do with the proceeds?
- How does this fit into my long-term financial plan?
These aren't questions you want to answer on the fly. The decisions you make in the months before and after a liquidity event can have permanent consequences—both good and bad.
Why This Moment Requires More Than Just Celebration
A liquidity event changes more than your bank account. It fundamentally shifts:
- How you earn income – transitioning from concentrated equity compensation to a more diversified portfolio of assets
- How you think about risk – from "what if this works?" to "how do I manage what I've built?"
- How you view money – from a future possibility to a present responsibility
This transition can be both exciting and complex. The goal isn't just to monetize your stock. It's to thoughtfully align this new wealth with your values, your goals, and your long-term strategy—so your wealth serves a meaningful purpose within your overall financial strategy.
The Four Phases of Liquidity Event Planning
We help clients navigate liquidity events using a four-phase framework. Understanding where you are in this process may help you focus on what actually matters—and identify planning considerations that may be relevant at each stage.
Phase 1: Assessment (Before the liquidity event)
This is where significant planning decisions are often made.Before your company goes public or opens a tender window, you need to:
- Understand what equity you own (ISOs, NSOs, RSUs, founder stock)
- Model potential tax implications under different scenarios
- Evaluate whether early exercise makes sense
- Determine if you qualify for special tax treatments like QSBS
- Coordinate with your advisory team (CPA, financial advisor, attorney)
The decisions you make here—especially around ISO exercise timing—can significantly affect tax outcomes depending on individual circumstances.But they're time-sensitive. Once the IPO happens or the tender window opens, many of these planning opportunities close. But they're time-sensitive.
Coming up in this series: We'll walk you through the complete Pre-IPO Planning Checklist and dive deep into one of the most important decisions many people face: whether to exercise ISOs before an IPO.
Phase 2: Strategy Design (During the event window)
Once liquidity becomes available, the questions shift:
- How much should I sell now vs. hold?
- What's my diversification strategy?
- How do I manage concentration risk while still believing in the company?
- Should I use this moment for charitable giving or family wealth transfer?
This is where emotion often overtakes logic. You've waited years for this moment, and now you're being asked to sell stock in a company you believe in.
A clear strategy—decided in advance—makes it easier to execute without second-guessing yourself later.
Coming up in this series: We'll explore how to approach a diversification strategy that seeks to manage investment risk while maintaining meaningful exposure to your company, plus strategic approaches to charitable giving and family gifting.
Phase 3: Implementation (Executing the plan)
This phase is about turning strategy into action:
- Executing stock sales according to your plan
- Setting aside cash for taxes
- Deploying proceeds into a diversified portfolio
- Implementing charitable or estate planning structures
- Managing the logistics of trading windows, 10b5-1 plans, and blackout periods
The goal is to move from concentration to clarity—working towards a financial structure that reflects your new reality.
Phase 4: Long-Term Optimization (After the liquidity event)
Once the dust settles, the work continues:
- Filing taxes and managing AMT credit recovery
- Rebalancing your portfolio over time
- Updating your financial plan as life evolves
- Revisiting estate planning and gifting strategies
- Thinking beyond just this event to long-term wealth building
Many people think the planning ends when they receive the cash. In reality, this is when long-term wealth management begins.
Coming up in this series: We'll show you how to transition from equity concentration toward long-term financial planning goals —building a plan that may evolve with your life.
Which Phase Are You In?
If your company is still private and you're holding unvested equity: You're in Phase 1 (Assessment). Now is the time to understand your equity, model scenarios, and coordinate your advisory team.
If your company just announced an IPO or opened a tender offer window: You're moving into Phase 2 (Strategy Design). You need to decide how much to sell, when, and what to do with the proceeds.
If you've recently sold equity and are sitting on cash: You're in Phase 3 (Implementation) or Phase 4 (Optimization). Now is the time to deploy capital strategically and build a long-term plan.
If you went through a liquidity event years ago: You're likely in Phase 4. The question becomes: is your wealth aligned with your current goals, or are you still managing it reactively?
The Big Mistake: Waiting Until It's Too Late
The most valuable planning opportunities happen before the liquidity event.
One of the most impactful? Exercising stock options—especially ISOs—before your company goes public.
Depending on individual facts and circumstances, early exercise may:
- Start the clock on long-term capital gains treatment
- Reduce Alternative Minimum Tax (AMT) exposure if done strategically
- Potentially qualify shares for Qualified Small Business Stock (QSBS) treatment
But once your company's valuation spikes or the IPO is announced, exercising can trigger massive tax bills—or become financially impossible.
With careful tax and exercise planning, clients may be able to reduce future tax exposure. We've also seen people miss the window entirely and experience higher tax outcomes based on their circumstances.
Key factors often include timing and coordination.
How We Help
This is why Brickley Wealth Management combines CPA services and financial advisory under one roof.
We provide integrated financial and tax planning under one roof, an approach that helps ensure tax and investment decisions are coordinated. We bring both together:
- Tax modeling and planning to evaluate your equity decisions and manage tax exposure
- Investment strategy to build a diversified portfolio aligned with your goals
- Coordination across your team (or we work directly with your existing CPA)
- Long-term financial planning that evolves as your life changes
Whether you're approaching a liquidity event or navigating the aftermath, we help you make evaluate decisions thoughtfully and with greater clarity.
What's Coming in This Series
Over the next six posts, we'll walk you through every aspect of navigating a liquidity event:
Post 2: Pre-IPO Planning Checklist – The specific steps you need to take before your company goes public, including equity documentation, tax modeling, and coordination strategies.
Post 3: Should I Exercise ISOs Before an IPO? – An overview of key factors startup employees should consider, including potential Alternative Minimum Tax (AMT) implications and Qualified Small Business Stock (QSBS) eligibility.
Post 4: How to Sell Company Stock After an IPO – A guide to developing a thoughtful diversification approach that manages investment risk and addresses the practical and emotional aspects of selling company shares.
Post 5: Charitable Giving During a Liquidity Event – How to maximize impact while minimizing taxes through strategic timing and structure.
Post 6: Estate Planning and Gifting Strategies – Using your liquidity event to build generational wealth through family gifting and trust strategies.
Post 7: Post-Liquidity Planning – Building a financial life beyond equity, from portfolio construction to long-term wealth management.
Each post builds on the last, creating a roadmap for your equity journey.
Next in this series: Pre-IPO Planning Checklist—the specific steps you need to take before your company goes public.