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Liquidity Events

Your company is being acquired or going public. The decisions start before the deal closes.

Cash or stock, QSBS, lockups, and a sudden change in net worth. We help you work through the decisions in order, and coordinate with your CPA and attorney along the way.

Talk to an Advisor

Rubric Advisors, a fee-only fiduciary in San Francisco, helps founders, executives, and employees plan the investment decisions around an acquisition, IPO, or tender offer, ideally before the deal closes. We compare elections and exercise timing, plan for lockups and sudden cash, and coordinate QSBS and other tax and legal questions with your CPA and attorney.

The problem

What decisions come with an acquisition, IPO, or tender offer?

An acquisition, IPO, or tender offer can turn paper wealth into real wealth quickly. It usually arrives with a short list of decisions and tight deadlines: elections, exercise timing, what to sell and when.

Many of those decisions are easier to get right before closing than after. Once the deal is done, some choices are no longer available.

The cost of waiting

Waiting until the money lands can mean elections are made by default, tax planning opportunities for the year have passed, and a large cash balance sits without a plan.

It is also when the calls start. A liquidity event tends to bring pitches from banks and product providers, often before you have had time to decide what you actually want.

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Avoid these

What mistakes do people make around a liquidity event?

Looking at deal terms one at a time

Cash-versus-stock elections, earnouts, and exercise timing affect taxes and risk for years. Evaluating them separately can miss how they interact.

Assuming QSBS applies, or doesn't

Qualified small business stock treatment has detailed requirements, and California does not conform to the federal exclusion. Getting it wrong in either direction is costly.

Investing everything immediately

A large, sudden cash balance invites rushed decisions. Many people prefer to hold cash, set aside taxes, and then invest in stages.

How we help

Questions we often hear, and how we help

Liquidity events are one of the situations we help individuals and families plan through as part of their overall wealth management. We focus on the investment decisions and coordinate closely with your CPA and attorney on tax and legal questions. For clients whose assets we manage, this is part of our ongoing work.

Deal-structure decisions

Cash or stock? What does the earnout mean for me?

We help you compare the options side by side: how each affects diversification, liquidity, and risk, alongside the after-tax picture your CPA prepares.

QSBS and state tax

Does QSBS apply to me? Does California honor it?

We help you gather what's needed to review QSBS eligibility with your CPA and attorney, and factor the federal and state treatment into the plan.

Sudden wealth

I went from paper-rich to a lot of cash in one day.

A staged landing plan: keep the cash in liquid, lower-risk holdings while taxes are set aside, agree on goals and risk, then invest in stages rather than all at once.

Everyone is calling

Every bank wants to pitch me the day the deal is announced.

We are fee-only: compensated by the advisory fees our clients pay, with no commissions and no proprietary products. Our fees are published, so you can compare them directly.

Lockups and post-IPO stock

I have 180 days, then what?

We set up a plan for the shares before the lockup ends, using the same approach we use for concentrated stock.

Tender offers

How much should I sell in the tender?

We help you weigh how much to sell against your diversification, cash needs, and tax picture, including how option exercises interact with the sale.

Our method

Before, at, and after the close

The same decisions, taken in the order that keeps the most choices open.

1
Before signing
Inventory your equity, understand the election and exercise choices, and review QSBS and state-tax questions with your CPA and attorney.
2
At close
Set aside estimated taxes, keep proceeds in liquid holdings, and confirm elections and deadlines.
3
After
Agree on goals, risk, and an investment plan; invest in stages; and plan for any lockup or remaining company stock.

Rubric Advisors does not prepare tax returns or provide legal advice. QSBS eligibility and the tax consequences of deal terms are reviewed with your CPA and attorney.

FAQ

Common questions

When should I talk to an advisor about a liquidity event?

Before you sign or make elections, if possible. Choices such as cash-versus-stock elections, option exercise timing, and some QSBS considerations are easier to evaluate before the deal closes.

What is QSBS?

Qualified small business stock under Section 1202 of the Internal Revenue Code can allow eligible shareholders to exclude some or all of the federal gain on a sale, subject to holding-period, issuer, and dollar limits. The rules depend on when the stock was issued, and eligibility is fact-specific and is confirmed with your CPA or tax attorney.

Does California recognize the QSBS exclusion?

California does not currently conform to the federal QSBS exclusion, so California residents generally owe state tax on gains that may be excluded federally. Rules change, so confirm the current treatment with your CPA.

My lockup is ending. What should I plan for?

Decide before the lockup expires how much to sell, over what period, and how it fits your tax budget for the year. Insiders may also face trading windows and may use a 10b5-1 plan, adopted with a broker and subject to the company's insider-trading policy.

My company is doing a tender offer. How do I decide whether to participate?

Tender offers are usually optional and time-limited. Weigh how concentrated you are, your cash needs, the tax treatment of the shares or options you would sell, and what you would do with the proceeds.

My company was acquired. What happens to my RSUs and options?

It depends on the deal. Unvested awards may be converted into the acquirer's awards, cashed out, accelerated, or cancelled. Your deal documents and equity plan govern the details, and we help you plan around what they say.

Where does the money go right after closing?

Many people start with liquid, lower-risk holdings while they set aside taxes and make a plan, then invest in stages. The right approach depends on your goals, timeline, and risk tolerance.

Plan before you sign

Book a complimentary 30-minute call. The conversation is most useful before you sign or make elections, while more choices are still open.

Talk to an Advisor

Not sure this is your situation? Find where to start or see our fees.

Guides for this situation

Planning Around a Liquidity Event: IPO, Acquisition, or Tender Offer

A liquidity event turns illiquid startup equity into cash or sellable stock. Tax, lockup, and diversification choices around it can matter for years.

Sudden Wealth & Liquidity Event Playbook

After an IPO, acquisition, or inheritance, a clear order of steps (tax reserves, a pause, diversification, estate updates) helps avoid costly mistakes.

QSBS (Section 1202): Who Qualifies and How Much Is Excluded

QSBS can exclude federal gain on qualifying startup stock: up to $15M or 10x basis for stock issued after July 4, 2025. California still taxes it.

RSUs in an Acquisition: Vesting, Conversion, and Taxes

In an acquisition, the merger agreement decides if RSUs are cashed out, converted to buyer stock, accelerated, or cancelled; vesting is taxed as wages.

Preparing for Your Company's IPO: An Employee's Checklist

Before an IPO, employees can map their equity, estimate the tax on RSUs and options, learn the lockup rules, and set a selling plan in advance.

Private-Company Tender Offers: Terms, Taxes, and Which Shares to Sell

A tender offer lets private-company holders sell some shares at a fixed price. The terms, share type, and holding periods decide what you keep after tax.

Deciding How Much to Sell in a Tender Offer

A tender offer decision is about how much, not yes or no. Weigh concentration, near-term goals, after-tax proceeds, and a range of company outcomes.

Timing ISO Exercises Around the Alternative Minimum Tax

Exercising ISOs creates no regular income tax, but the spread counts for AMT; knowing where AMT starts helps size and time each exercise.

Sources

This page is educational and is not personalized investment, tax, or legal advice. Rubric Advisors does not prepare tax returns or provide legal advice; tax and legal decisions are made with your CPA and attorney. Because our fee is based on the assets we manage, we have an incentive to recommend that you place more assets with us; see our Form CRS. Strategies described here are not suitable for every investor, involve risk, including possible loss of principal, and outcomes depend on your individual circumstances and market conditions.