Navigating an Initial Public Offering (IPO) or recapitalization can be a complex journey with a myriad of financial, personal, and emotional implications.
In our experience, it helps to discuss your goals and priorities with your advisor well in advance of the event to make sure you are well prepared to address important questions the moment presents, such as:
- How do I incorporate the proceeds of the IPO into my long-term financial plans?
- Is it better to exercise or hold my stock options?
- Am I eligible for any other tax mitigation strategies (e.g., qualified small business stock exemptions)?
- Should I adjust my goals and priorities, and if so, do I need to reflect those changes in my estate plan or philanthropic strategy?
We’ll help you make sense of the financial and emotional implications of these events and help you have a clearer sense on how to achieve the best possible outcomes for you and your family.
I am keenly aware of the profound sense of responsibility I have worked with clients who have experienced an IPO or recapitalization. Being an integral part of their financial and emotional journey is a privilege.
Our IPO and Recapitalization Advisory Services
At Mercer Advisors, we understand that navigating the complexities of an IPO or recapitalization requires planning and support tailored to each individual circumstance. As a fiduciary, it is our responsibility to understand your situation, goals, risk tolerance, and personal preferences to help assess how to create the financial plan that best meets your needs.
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When people hear about IPOs or recapitalizations, they typically think about the wealth of those involved experience, but they often fail to realize the extended time horizons over which the accumulation takes place. For instance, there are many kinds of stock or equity options (RSUs, NSOs, etc.), that have different constraints around how and when they can be exercised. Additionally, companies may add vesting layers, creating an additional layer of complexity that can further impact when the proceeds hit the bank account.
Our advisors have helped many clients in similar situations and can help you untangle this complexity to understand your financial position and devise a plan suited to your personal needs.
To create your plan, we start by looking at five areas:
- Investment and risk management plan: Along with the changes around the scope and scale of your portfolio, there are new factors you may not have considered before, such as concentration risk and volatility that can change the way one should think about their holdings. We can build a custom plan tailored to your goals and risk tolerance to help navigate that uncertainty.
- Tax strategy: Your new tax bill is substantially higher than ever before – we can incorporate the right strategies to help mitigate that liability thoughtfully.
- Estate plans: We believe that everyone should have an estate plan. In addition to protecting your loved ones, this ensures that your wishes for your assets are followed upon your passing.
- Charitable giving: Philanthropically inclined? Should you form your own foundation or use a Donor Advised Fund? We can explain the tradeoffs of each and can help make each dollar go further for the causes about which you care the most.
- Lending needs: There are myriad reasons to consider lending and myriad ways to structure financing – we can advise you each step of the way to help get the right solution for your needs.
At Mercer Advisors, we have the privilege of serving you and your family through transformational life events. This concept of service is core to who we are and what we do, and accordingly, we aim to provide you with the best financial advice available to help meet your personal, professional, and financial aspirations.
Pre-IPO Planning Considerations
