Financial planning for pre-IPO employees.
If most of your net worth sits in stock you cannot sell yet, your decisions are about timing and taxes, not picking investments. Austin Creek Capital works with employees of private, venture-backed companies on option exercise timing, alternative minimum tax exposure, tender offers, and building a plan that holds up whether or not the equity becomes liquid.
We are a fee-only, fiduciary registered investment adviser in Mill Valley, California. Our only compensation comes from our clients.
What makes pre-IPO equity different.
Four problems show up in almost every conversation we have with employees at private companies.
- Your net worth is real on paper and unusable in practice Most of what you have is in a private company's stock. You cannot sell it, borrow against it safely, or spend it, and its value is a number someone else set at the last funding round. Meanwhile the mortgage, the childcare, and the tax bill are all in cash. Planning at this stage is mostly about making cash-flow decisions that do not depend on the equity working out.
- Exercising options can create a tax bill before it creates any money Exercising incentive stock options does not trigger ordinary income tax, but the bargain element counts toward alternative minimum tax. The 2026 AMT exemption is $140,200 for a married couple filing jointly and $90,100 for an unmarried filer, and it begins to phase out at $1,000,000 of income for joint filers. Above $244,500 of taxable excess the AMT rate steps from 26% to 28%. The result is a cash tax bill on stock you still cannot sell.
- Tender offers arrive with a deadline and no advice attached A tender offer is often the first chance to turn paper into money, and the window is usually short. The company will tell you the mechanics. Nobody will tell you how much to sell, how the proceeds are taxed, whether your shares qualify for long-term treatment, or what selling now costs you if the company later goes public at a higher price. Those are the questions that actually determine the outcome.
- A liquidity event compresses years of decisions into a few weeks An IPO or acquisition turns a single concentrated position into a diversification problem, a tax problem, and an estate problem at the same time. Withholding on vesting shares is a flat 22% until cumulative supplemental wages pass $1,000,000, then 37%. For a high earner in the top bracket, that first rate is well short of what is owed, and the shortfall is not obvious until the return is filed.
Figures cited are 2026 amounts. This is educational information, not individualized tax advice. Consult your own tax professional before acting on any of it.
Three ways to work together.
Most pre-IPO employees start with a one-time project, because the pressing questions have deadlines and there are often no liquid assets to manage yet.
| Engagement | Fee | Typical fit |
|---|---|---|
| One-time planning project | $3,000 to $10,000Most land between $3,000 and $5,000 | An exercise decision, a tender offer, or preparing for an announced liquidity event. |
| Ongoing planning retainer | $1,500 to $3,000 to start, then $300 to $3,000 / monthInvestment management optional at 0.50% of assets, no minimum | Multi-year exercise planning, or a household with equity on both sides. |
| Investment management | 1.00% to 0.75% of assetsBlended by tier, $7,500 annual minimum | After a liquidity event, when there are proceeds to invest. |
Fees are negotiable and individual accommodations may be made consistent with our Form ADV. Full terms are on the services and fees page and in our Form ADV Part 2A.
What we actually do.
A first engagement usually covers four things.
- A map of what you actually hold Grant by grant: option type, strike price, grant and vest dates, exercise windows, expiration, and the holding-period clock on anything already exercised. Most people arrive without this, because it is scattered across an equity portal, a few PDFs, and memory. Almost every later decision depends on getting it right.
- An exercise plan with the tax modeled first How much you could exercise in a given year before alternative minimum tax becomes the binding constraint, what spreading exercises across calendar years changes, and what each version costs in cash. The answer depends on your other income, so it is specific to your household rather than a rule of thumb.
- A decision framework for liquidity, before the deadline For a tender offer or a secondary sale: how much to sell, what the proceeds are taxed at, whether any of it qualifies for long-term treatment, and what remains concentrated afterward. California taxes capital gains as ordinary income, at rates reaching 13.3% once the 1% surcharge on income above $1,000,000 applies, so the state consequence is not a rounding error here.
- A plan that survives the equity going to zero We cannot tell you whether your company will succeed, and we will not pretend otherwise. What we can do is make sure your savings, insurance, and cash reserves are sized so that the equity is upside rather than the foundation. That is the part clients tend to postpone until it cannot be fixed.
Common questions from pre-IPO employees.
When should I start working with an advisor if my company has not gone public?
Before an exercise deadline or a tender offer, not after. Most of the decisions that change the outcome, when to exercise, whether to file an 83(b) election, how much to sell into a tender, have deadlines attached and cannot be revisited later. If you are holding options with an expiration date or you have been told a liquidity event is coming, that is the moment.
Do you help with the decision to exercise, or only after I have exercised?
The decision itself. That means modeling the AMT consequence of exercising in a given year, comparing it against exercising across multiple years, and weighing both against the possibility that the stock is worth nothing. We are not able to tell you whether your company will succeed. We can tell you what each path costs and what happens to your finances if the equity goes to zero.
I have a tender offer with a deadline in two weeks. Is that enough time?
Usually yes, because the analysis is bounded. It requires your grant documents, your exercise history, your holding periods, and your other income for the year. What it cannot do in two weeks is fix a decision made in a prior year, which is why the earlier conversation matters more.
How much does my equity need to be worth for this to make sense?
There is no minimum for planning work. Investment management on its own carries a $7,500 annual minimum fee, which is waived for ongoing planning clients. Many pre-IPO employees start with a one-time planning project because their wealth is illiquid and there is nothing to manage yet.
Will you manage my money after a liquidity event?
Only if you want that. Planning and investment management are separate engagements with separate fees. Some clients do a one-time project before an event and nothing else. Others add investment management once there are proceeds to invest. Neither is a condition of the other.
Do you provide tax advice or file my return?
No. We do tax planning, which means modeling the consequences of decisions before you make them, and we work alongside your CPA. We do not prepare returns and we do not replace a tax professional. If you do not have one, we can point you toward accountants who work with equity compensation.
More on equity decisions.
- Tender offers: how to decide, and how the sale is taxed
- Navigating pre-IPO tender offers, a tax strategy guide
- You have stock options. Do you know which kind?
- The 83(b) election, a two-page form that matters
- IPO lockup expiration: the tax already happened
- Your company is going public. What do you do before the IPO?
- If your household also has a public sector income
- Estimate RSU taxes and net proceeds
Twenty minutes is enough to know if we're a fit.
No pitch, no pressure. A short call where we ask what's actually on your mind right now, and you decide whether you want to go further.