Should I sell now or wait for the IPO?

Waiting for an IPO can mean a higher price and lower discount — or years of risk for an exit that never comes. Here's how to weigh certain-but-discounted against potential-but-uncertain.

The case for waiting

No illiquidity discount at IPO. Public shares trade at full market price, not the discounted secondary price.
Possible upside if the company grows into and beyond its IPO.
Cleaner tax once you've reached long-term treatment.

The case for selling now

The IPO may be years away — or never. Most private companies don't IPO on any predictable timeline.
Risk. A lot can go wrong between now and an exit; a down round or failure can wipe out paper gains.
Lock-ups. Even after an IPO, a lock-up (often ~180 days) delays selling, and the price can move sharply before it lifts.
Concentration. Selling now diversifies risk you may be over-exposed to. Check it.

How to weigh it

Frame it as insurance versus a bet. Selling a slice now buys certainty at the cost of some upside and a discount; waiting keeps full upside but risks the whole position on an uncertain, possibly distant event. Many people do both — sell some now, keep some for the IPO.

Reality check: the discount to sell now is real, but so is the risk of waiting. Neither 'always wait' nor 'always sell' is right — size it to your concentration and conviction.

Frequently asked questions

Is it better to wait for the IPO to sell?

Sometimes. Waiting avoids the illiquidity discount and can capture more upside, but it risks everything on an exit that may be years away or never happen, and lock-ups delay selling even after an IPO. For heavily concentrated employees, selling a portion now to diversify is often prudent.

Will I get a better price at IPO than in a secondary?

Often the per-share price is higher at IPO because there's no illiquidity or minority discount — but only if the company IPOs, the price holds through the lock-up, and the business performs. A secondary gives you a certain, if discounted, price today.

What is a lock-up and how does it affect me?

A lock-up is a period after an IPO — commonly around 180 days — during which employees and insiders can't sell. It means an IPO doesn't give you instant liquidity, and the share price can move significantly before you're allowed to sell.

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