Your company just IPO'd — what to do with your equity now

An IPO turns paper equity into something you can (eventually) sell — and quietly starts a tax and risk clock most people don’t see coming. Here's the calm, plain-English version of what happens next and how to decide, with none of the dates that go stale — just the mechanics that don’t.

First: the lock-up — why you can't sell on day one

Almost every IPO comes with a lock-up: a period, commonly around 180 days after listing, during which employees and insiders can’t sell their shares. It exists to stop a flood of selling from crushing the new share price. Confirm your own company’s terms — some run shorter or longer, and a few allow small early-sale windows.

Two things worth knowing while you wait:

The price you see isn’t the price you get. Public shares move daily; by the time your lock-up lifts, the number can be well above or below the IPO price. Don’t anchor to day-one headlines.
Tax may already be due even though you can’t sell yet (next section). The lock-up blocks selling, not the tax clock.

What actually happens to your RSUs

Most RSUs at a newly public company are double-trigger: they need both time-vesting and a liquidity event (the IPO) before they turn into real shares. So at (or shortly after) the IPO, a backlog of vested RSUs settles into shares at once.

When RSUs settle, their value is taxed as ordinary income — like salary — whether or not you sell. Your employer usually withholds some shares to cover it, but that withholding is often at a flat supplemental rate that under-withholds for higher earners, leaving a gap you’ll owe later. From that moment, any further gain or loss is a capital gain or loss on top.

The big decision: sell at vest, or hold?

Here’s the clarifying question most advisers come back to: if you were handed the cash equivalent today, would you buy this many shares of your employer? For almost everyone the honest answer is “no, not that concentrated” — which is the argument for selling at (or soon after) vest and diversifying.

Selling at vest is close to tax-neutral: you’ve already paid ordinary income tax on that value, so there’s little extra capital gain to trigger. Holding is a new, separate bet that your single employer’s stock beats a diversified portfolio — made with money that’s already taxed and already at risk through your salary.

Holding can make sense in narrow cases — strong conviction, a small position relative to your net worth, or a specific tax reason — but treat it as a deliberate investment decision, not the default that happens when you do nothing. Model it first with the free concentration-risk calculator.

Concentration risk — the one mistake to avoid

The single most common post-IPO error is letting one stock quietly become most of your net worth. Your income already depends on this company; tying your savings to it too doubles the bet — if the company stumbles, your job and your portfolio fall together.

A simple rule of thumb many use: decide the maximum share of your net worth you’re comfortable holding in any single stock, and trim back to it as lock-ups lift and RSUs vest. The concentration calculator shows where you stand.

The tax to plan for

Two layers, kept country-agnostic (confirm your own):

At vest/settlement — ordinary income. Often under-withheld. In the US, the flat supplemental withholding can leave a gap you must cover with estimated tax; set the difference aside rather than being surprised at filing. The free RSU withholding-gap calculator estimates it.
At sale — capital gains on any change since vest. How long you hold after vest can change the rate (short- vs long-term in the US; your own regime in Europe). This is a reason to plan the sale, not to hold reflexively.

Europe differs by country — the instrument (RSU, VSOP, BSPCE, options) and your residence drive the treatment. Start from the RSU & public-company equity hub and your own tax authority.

Your move, step by step

Find your lock-up date and any early-sale windows (your equity portal or company FAQ).
Work out the tax already due at vest and whether you’ve been under-withheld — set the gap aside.
Decide your concentration limit — the max share of net worth in this one stock.
Plan the sale to that limit as the lock-up lifts, rather than selling all at once in a panic or holding by default.
Keep the rest diversified. The goal is turning a lucky, concentrated outcome into durable wealth.

Frequently asked questions

When can I sell my shares after the IPO?

Usually only after the lock-up period ends — commonly around 180 days after the listing, though it varies by company and some allow limited early-sale windows. Check your own company's terms; the IPO date plus the lock-up length is what matters, not the first day of trading.

Do I owe tax even if I don't sell?

Usually yes. When RSUs settle into shares (often at or shortly after the IPO), their value is taxed as ordinary income whether or not you sell. Your employer typically withholds some shares, but that can under-withhold, leaving a gap you'll owe later. Selling triggers a separate capital gain or loss on any change since then.

Should I sell my RSUs at vest or hold them?

A useful test: if you were handed the cash today, would you buy this many shares of your employer? If not, selling at vest and diversifying is the lower-risk default — and it's close to tax-neutral since you've already paid income tax on that value. Holding is a new, concentrated bet; make it deliberately, not by inertia.

What is an IPO lock-up period?

A set period after a company goes public — commonly ~180 days — during which employees and insiders can't sell their shares, to avoid a flood of selling that would hurt the new share price. Your shares are yours; you just can't sell until it lifts.

What are double-trigger RSUs?

RSUs that need two things before they become shares: time-vesting and a liquidity event such as an IPO. That's why a backlog of vested RSUs often settles all at once at the IPO — which is also when the income tax on them lands.

Get the numbers before you decide

Free, no sign-up: estimate what your stake is worth, the cost to exercise, and whether you can sell.

Value my equity (free) → · All free tools → · Glossary →

When you're ready to go deeper, there's an optional Equity Toolkit and Report.