IPO Spotlight: From Concentrated Equity to Flexible Liquidity

Initial public offerings are financial milestones for founders, executives and employees, often transforming decades of effort into substantial wealth.¹ While IPOs can create the potential for significant liquidity down the road, equity holders may not have immediate, unrestricted access to the cash they often need or desire for major purchases, new investments or tax obligations.

Whether you are restricted from selling shares, prefer to maintain exposure to your company’s future growth or seek to avoid adverse tax outcomes, a coordinated liquidity strategy, as described in a three-part framework below, can help you access capital without forcing a sale at the wrong time.

1. Define the Need

Work with your advisors to answer key questions regarding your liquidity, or cash, needs and how each factor aligns with your broader plan. Having a clear line of sight into the considerations below will help identify where taxes, trading restrictions or other constraints can limit flexibility, especially when much of your wealth remains tied to company equity.

• Amount: How much liquidity do you need, now and over time? How does that need compare with your current liquid assets, anticipated future liquidity, accessible equity holdings and other sources of capital?
• Timing: When will you need cash? How do lockups, trading windows or market conditions affect access to liquidity?
• Purpose: Is the need tactical, such as meeting tax obligations or funding lifestyle needs? Or is it strategic, such as acquiring real estate, investing in a business or supporting philanthropic goals? As illustrated in the “Leverage vs. Liquidation” graphic below, a goals-driven framework can be instrumental in helping to optimize decisions within the context of your broader plan.
• Complexity: How complex or time-consuming will it be to access the capital considering lockup periods, blackout windows, financing requirements, portfolio coordination and taxes? How many decisions and stakeholders will be involved? Do you have an advisor to help identify constraints and coordinate moving pieces? You can address some liquidity needs simply, while others require sustained coordination across advisors.

Taken together, these questions help distinguish required, desired and strategic liquidity needs and provide a foundation to evaluate potential sources of capital. That clarity becomes especially important when trading restrictions prevent investors from selling shares freely.

2. Evaluate Leverage Options Across Your Balance Sheet

An inclination to sell shares is often a default response, but that approach is not always available or optimal. Lockups, trading windows, tax consequences and a preference to retain your stock may make an immediate sale impractical or undesirable. A comprehensive approach considers the full balance sheet and evaluates a range of potential liquidity sources, including lending where appropriate. Solutions can include: 

• Securities-based lending: Securities-based lending, where available and appropriate, may provide liquidity against eligible collateral, subject to credit approval and applicable restrictions.
• Real estate-based borrowing: Using residential, commercial or investment property equity as a source of capital.
• Intra-family, trust or private lending: Coordinating liquidity within a broader family balance sheet, trust structure or private network.
• External financing for new ventures: Third-party lending based on total asset strength.

Once sources are identified, the decision should turn to how each approach affects flexibility, repayment, collateral requirements, taxes, portfolio risk and future participation in company growth. For IPO participants, those trade-offs may be amplified by concentrated equity exposure, trading restrictions, tax timing and uncertainty around post-IPO share performance. The right strategy may therefore combine several approaches: for example, staged sales when permitted, borrowing against eligible assets, and maintaining your preferred level of company exposure to participate in potential future upside.

3. Align Your Strategy with Your Goals

Liquidity planning is not simply about accessing cash, it is about accessing capital in a way that is fully integrated with your broader plan to support your longer-term objectives.

IPO-generated wealth often introduces concentration risk, requiring thoughtful consideration of all approaches. Investors often achieve better outcomes when they sequence these decisions deliberately over time rather than address them in isolation. In practice, an effective plan may require a coordinated mix of strategies, including:

• Rule 10b5-1 plans: Establish predetermined selling programs that can help reduce timing and behavioral limitations and risks.
• Charitable strategies: Donate appreciated assets to manage taxes, support philanthropic goals and reduce concentration.
• Exchange funds: Diversify holdings without immediate realization of capital gains.

¹ By way of example, the 2026 SpaceX IPO was expected to create more than 4,400 employee millionaires and more than 400 individuals with equity valued at more than $100 million. Griffith, Erin. “SpaceX’s I.P.O. Could Make Its Employees Millionaires.” The New York Times. June 10, 2026. https://www.nytimes.com/2026/06/10/technology/spacex-ipo-employee-millionaires Accessed 5 August 2026.