Author Topic: Opportunity to sell stock in private company  (Read 1024 times)

BayAreaFrugal

  • 5 O'Clock Shadow
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  • Posts: 62
Opportunity to sell stock in private company
« on: November 04, 2019, 04:28:11 PM »
Hi folks,

My company is pre-IPO and occasionally has liquidity events where we can opt to sell vested options or shares. I am allowed to sell up to 20% of my holdings. Here's a summary of what I have:

Exercised shares (cost basis varies from $0.25 to $3.99) - 5,024
Vested options ($3.99 strike price) - 1,615
Vested options ($7.45 strike price) - 926

I'm allowed to sell up to 1,513 shares/options at an offer price of $12. Exercised shares have all been held for longer than a year so will be subject to long term capital gains (15%). Options will be taxed at my regular income tax rate (22%).

How would you split the 1,513 shares/options across each of those groups? Note that I have absolutely no idea what the future will hold, but I'm relatively sure an IPO (if it happens) would be at least three years out.

plog

  • Bristles
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  • Posts: 253
Re: Opportunity to sell stock in private company
« Reply #1 on: November 05, 2019, 08:57:12 AM »
No split, sell exercised shares.  Less taxes and they are more 'real'.

First and foremost, private stock is not real stock. You can't take it to a broker, you can't sell it whenever you want and the market doesn't determine the price--it may be technically a share of ownership in a company but it's not stock as stock is commonly defined.

Therefore, cash in as soon as and whenever you can.