Amid the most anticipated IPO class in years, SpaceX has already had a record-setting IPO. Anthropic and OpenAI have filed confidentially with the SEC and are also expected to mint a lot of new millionaires. For many current and former employees, the IPO will be their first major liquidity event, perhaps the only one they’ll experience in their lifetime. And if you haven’t done it before, you don’t know what you don’t know. The most common post-IPO mistakes are also the most obvious — which is probably why they’re so often under-planned for: failing to plan before the trading window opens, leaving financial goals out of the sales strategy, anchoring to the IPO price and underestimating your risk.
As a financial advisor who specializes in managing post-IPO liquidity, here’s what employees often get wrong when their company goes public — and how to avoid it.
Failing To Plan Ahead Of A Lockup Release Or Trading Window
After an IPO, shareholders are often restricted from selling their stock right away because of the lockup period. Traditionally this was a 180-day cliff, but 2026 is the year of the mega-IPO, so the rules are changing. For example, the majority of SpaceX shareholders have seven staggered release dates before restrictions are fully lifted in December.
One of the biggest mistakes after an IPO is not using this mandatory waiting period to get organized, assess your concentration risk and liquidity needs, and begin to formalize and quantify your financial goals.
For example, if you’re looking for tax-efficient ways to diversify, you’ll need the cost basis for every share — which can differ from what your stock-plan portal shows. It’s also crucial to understand the tax treatment of each type of equity you have and how taxes work: incentive stock options, nonqualified stock options, fully vested RSUs (now common stock), and double-trigger RSUs — which create a tax bill at IPO whether or not you sell. Employers often withhold below your true marginal rate, so you’ll need to do extra tax planning to avoid interest, penalties, and a liquidity crunch at tax time.
The point isn’t to have every answer mapped out; in fact, I strongly advise against a rigid plan. But the key is to have a framework ready so you’re not improvising which shares to sell once you have liquidity. For more on getting organized before a company goes public, see my pre-IPO financial planning checklist for employees.
Not Considering Financial Goals In The Diversification Plan
Facing a multi-million dollar liquidity event after an IPO is an exciting prospect. But it’s also terrifying if you aren’t equipped to handle it and don’t have the right advisory team in place to help. Knowing how much to sell after the lockup and at what price is going to be an ongoing, iterative exercise. Getting it right often comes down to letting your financial goals drive the strategy.
Many current and former employees of the 2026 IPO cohort are likely in their 30s, 40s, and early 50s. They’re probably not ready to retire, have a sense of what that looks like, or understand what an IPO means for employees, much less the things they should be doing after going public to prepare.
Other common financial goals include: paying for college, buying a new home, helping a family member financially, generational family wealth, and overall financial flexibility.
Quantifying these goals is ideal, but without anything concrete in mind, try to consider a baseline amount to de-risk for your most basic future financial needs plus your immediate cash needs.
Estimating Baseline Financial Needs After An IPO
To assist with some preliminary calculations on spending capacity post-IPO, the table below shows four different Monte Carlo simulations for starting portfolios between 2 million and 15 million dollars. A safe annual withdrawal rate (in today’s dollars) was calculated for both a 25- and 45-year retirement horizon. Since everyone has a different retirement timeline, the figures below simply assume an immediate exit.
Important caveat: this analysis uses the risk profile of a diversified portfolio. The stock of one company does not move like the stock market does.
Anchoring To The IPO Price (And Underestimating Risk)
After the IPO, your single stock exposure may be even larger than your statement suggests. As mega-cap IPOs get fast-tracked into the Nasdaq 100 and other major indices, your diversified funds may start holding increasingly meaningful amounts of the same stock. Consider ways to reduce risk and concentration, both directly and indirectly.
Newly public companies are notoriously volatile. Anchoring to the IPO price, last highest 409A valuation, or some other highwater mark can quickly derail a diversification plan (“I’ll sell once it gets back to…”). Decades of IPO research from Professor Jay Ritter at the University of Florida show newly public companies have, on average, underperformed comparable firms in the years after going public.
What this data means for your concentrated stock position is anyone’s guess at this stage. But as you consider price targets and timeline in your diversification plan, try to be objective. Employees with stock often have a bias towards the company. It’s ok to be overweight, even long-term, but it shouldn’t be the only position that has any real weight in your portfolio.
Don’t Let The IPO Run The Show
So much can happen after an IPO, I could write a short book on what could go wrong. My objective isn’t to scare employees into inaction — it’s actually the opposite. Because so much can happen that is outside of your control, it’s essential to take control of the elements you can impact. Rocket scientist or not, you don’t have to go it alone. Partnering with a financial planner after an IPO — ideally an advisor who works with equity compensation and liquidity events regularly — can help you avoid these (and other) mistakes, as well as plan for big decisions like how to manage the proceeds.
Kristin McKenna, CFP®, is the President of Darrow Wealth Management and a Forbes contributor. Examples in her articles are generic, hypothetical and for illustration purposes only and should not be misinterpreted as personalized advice of any kind or a recommendation for any specific investment product, financial or tax strategy. This general communication should not be used as the basis for making any type of tax, financial, legal, or investment decision. If you have questions about your personal financial situation, consider speaking with a tax and financial advisor.
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