What happens to my RSUs when my company IPOs?

If your RSUs are double-trigger — common at late-stage private companies — the IPO is the liquidity event that lets previously time-vested units settle. They settle as ordinary income, potentially a large amount in a single year, often during or shortly after the lock-up. Single-trigger RSUs settle on vesting regardless. Check which type you hold before the listing.

How long is the IPO lock-up period?

Typically 90 to 180 days after the listing, during which employees and insiders generally cannot sell. The exact length and any early-release terms are set in the IPO paperwork. The share price can move substantially while the lock-up is in force, so plan around when it lifts rather than the IPO date itself.

Should I exercise my stock options before my company goes public?

It can reduce tax, because exercising while the 409A value is lower usually means a smaller taxable spread and can start the long-term capital-gains clock. But it costs cash and carries real risk if the listing disappoints. There is no universal answer — it depends on your cash, risk tolerance and conviction — so model the AMT and take advice before deciding.

Equity & liquidity events

Preparing for your company's IPO — what it means for your equity

An IPO is the moment paper equity can finally become money — but it rarely works the way people expect. Lock-ups, double-trigger RSUs and the tax bill all land at once. Here's what to understand before the window opens.

Written & maintained by the PrivateTechShares team · Published November 2026 · Reviewed November 2026

Part of our guide to equity in a liquidity event.

When a private company lists, the employees holding its equity face a short, high-stakes set of decisions. The good outcomes tend to go to people who understood the mechanics before the S-1 landed — not those scrambling in the week of the roadshow. There are four things that decide what an IPO actually means for you.

Why this is on everyone's mind right now. The largest private tech companies are moving toward the public markets. As of November 2026, Anthropic is reported to be preparing an IPO — the Financial Times and other outlets reported it is targeting a listing around this period, though, as with any IPO, the exact timing can and does slip. Whether it's your employer or not, the same mechanics below govern what a listing means for the shares and options you hold.

1. The lock-up — you usually can't sell on day one

An IPO makes your shares public, not instantly sellable. Employees and insiders are almost always bound by a lock-up period — commonly 90 to 180 days after listing — during which you can't sell. The price can swing a long way in that window, up or down, while you simply hold. Plan around the lock-up expiry, not the IPO date.

2. Double-trigger RSUs — a tax bill can land at the IPO

Many late-stage private companies grant double-trigger RSUs: the units only settle when two conditions are met — you've hit the time-based vesting and there's a liquidity event such as an IPO. The listing trips that second trigger, so RSUs that have been quietly time-vesting for years can all settle at once. That settlement is ordinary income, often a large figure in a single tax year — even though the lock-up may stop you selling shares to pay for it. Find out whether yours are single- or double-trigger, and budget for the withholding gap.

3. Options and AMT — exercise timing matters

If you hold options rather than RSUs, when you exercise drives the tax. Exercising ISOs while the company is still private — when the 409A value is lower — generally means a smaller bargain element and can start the clock toward long-term capital-gains treatment. Exercise after a big IPO pop and the spread, and the AMT exposure, is usually far larger. There's no one right answer — it turns on cash, risk and conviction — but it's a decision best made before the rush, not during it.

4. After the lock-up — trading windows and 10b5-1 plans

Once the lock-up lifts, you still can't trade whenever you like. Public-company employees sell during open trading windows and steer clear of blackout periods around earnings; many set up a 10b5-1 plan — a pre-scheduled selling plan that lets shares sell on autopilot without the risk of trading on what you know. If you'll be left holding a concentrated position in one stock, decide your diversification plan in advance.

Get ready before the window opens

A listing is one of the few moments your equity turns real. The people who do well are the ones who did the homework early:

Know your grant type — options (ISO/NSO) versus RSUs, and single- versus double-trigger.
Map your vesting and any exercise cost — what's vested, what it would cost to exercise, and by when.
Model the tax — ordinary income on RSU settlement, AMT on ISO exercise, and the withholding gap.
Set aside cash for taxes — a bill can arrive while your shares are still locked up.
Plan the lock-up and your diversification — decide in advance how much of one company you want to keep holding.

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