My Company Is Going Public: What Happens To My RSUs?
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- čas přidán 4. 07. 2024
- When you work at a private company and they announce that they are going to IPO, it can be an exciting time. It's especially true if you also have stock compensation in the form of Restricted Stock Units, or RSUs.
What does double-trigger vesting mean?
Why do some private companies structure RSUs this way?
What do I need to do to plan for the taxes?
Why it's important to be intentional with your money.
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This is so helpful! I
Just noticed that u r Liverpool fan.. me too :) YNWA
Are the stocks still available if you leave before the company ipos but after the time trigger occurred?
Could you do a video explaining RSUs for private companies without the expectation of going public? What do these RSUs actually mean if you don’t know whether your company will ever go public or not? Do you still have to pay taxes on vested RSUs even if the company isn’t planning on IPO
It's similar to what I mentioned in this video in that it depends if they're double trigger RSUs or not. It should say one way or another in your grant document.
If they are, then you wouldn't pay taxes until the 2nd trigger happens (not just an IPO, it could be an acquisition or a tender offer like what is happening at Stripe right now).
If they're not double trigger, then they would become taxable income as soon as they vest & based on the current 409A valuation, even if it's still private & you can't actually sell your shares.
Can you explain SPACs as alternatives to IPOs?
Hey Mike! Thanks for this really helpful video. Just to make sure I’m understanding correctly, with the “double trigger”, this essentially protects the employee from having to pay taxes for RSU’s that haven’t IPO’d, correct? If so, that means you won’t have to pay taxes until the company goes public, correct? Thanks in advance
Right. It's solving the issue of employees getting taxed on compensation that they can't actually access. So the 2nd trigger is any sort of "liquidity event" that allows the RSUs to be sold, such as an IPO or the company getting acquired. Keep in mind that not all private company RSUs work this way, so be sure to read the vesting details in the grant doc.