IPO & Acquisition Planning for Business Owners
Most liquidity events are won or lost in the planning phase, not the execution phase. The difference between planning 3 years ahead and 6 months ahead can be millions in after-tax proceeds.
Financial Readiness Before You Negotiate
Before you accept a term sheet or IPO valuation, you need to know how much you actually need to walk away.
We build a financial plan that clarifies your walk-away number. This removes the emotional trap of “I need as much as possible” and gives you freedom to recognize the right offer when it comes.
A client once had a plan from a large firm telling him he needed $50 million to retire. He turned down a $40 million offer, thinking he had to keep pushing for more. When we redid the plan, it turned out $30-35 million would have been more than enough. But by then, the market had shifted, and the $40 million offer
The key is to be realistic, not too conservative and not too aggressive. A thoughtful plan creates freedom to choose your moment.
Structuring Before the Deal
Most tax-saving strategies require action before your liquidity event, not after.
QSBS (Qualified Small Business Stock):
We helped a client structure a new business as a C-Corporation from inception to qualify for Qualified Small Business Stock (QSBS) treatment. By thoughtfully allocating ownership among multiple qualifying shareholders, the family positioned themselves to exclude up to $40 million of capital gains upon a future sale under Section 1202. In this scenario, instead of paying capital gains tax on $50 million, only $10 million would remain taxable, resulting in approximately $10 million in tax savings. This strategy required advance planning, proper capitalization, and careful coordination well before any exit discussions.
Squeeze and Freeze:
If your stock is about to increase significantly in value, do you want that appreciation inside your taxable estate or outside of it? We use squeeze and freeze techniques to lock in today’s lower valuation and move future growth into irrevocable trusts before the event triggers.
Basically, we squeeze down the value of your business through various discounting methods, freeze it by putting it inside an irrevocable trust, and then all that growth when you sell happens outside of your estate. You’ll pay zero estate taxes on it.
Reducing Concentration Risk
After lockup ends or vesting completes, you face a critical decision: how fast do you diversify?
Holding too much in a single stock exposes you to volatility you can’t control. We build a systematic diversification plan that balances tax efficiency with risk reduction.
This might involve tax-loss harvesting to offset gains, charitable gifting of highly appreciated shares to donor-advised funds, or spreading sales across multiple tax years to stay in lower brackets.
Managing Sudden Wealth
Sudden wealth creates financial and emotional pressure. Before you buy the vacation home or upgrade your lifestyle, we run the numbers. Can you actually afford it long-term, or are you spending unrealized gains?
We coordinate with your CPA and attorney to ensure every decision has tax implications mapped out. This includes timing stock sales for optimal tax treatment, using retirement accounts and charitable strategies to offset gains, and implementing estate strategies before wealth grows further.
At Cinder Wealth, we don’t write legal documents or prepare tax returns. But we make sure the right ones get done, and that they align with your bigger picture. We work side by side with your CPA and attorney to ensure your plan is both comprehensive and coordinated.
Preparing for a Liquidity Event?
Whether you’re 12 months from an IPO or just received a term sheet, we’ll assess your situation and build a plan to minimize taxes and maximize what you keep.