An IPO turns paper wealth into a countdown. Somewhere in the prospectus is a lockup, usually around 180 days, after which employees can finally sell. The date is knowable months in advance, which makes it one of the few financial events you can actually plan for. Most people do not.
A lockup is a contractual period after the IPO during which insiders and employees agree not to sell their shares. It exists to keep the newly public stock from being flooded with selling on day one. For you, it means your equity is real but frozen, and the moment it thaws, a large, concentrated, and often highly appreciated position becomes sellable all at once, along with everyone else's.
A point that surprises many RSU holders: for restricted stock units, the tax event is vesting, not selling. When RSUs vest, their value is treated as ordinary income, and your employer typically withholds shares to cover part of it. But the standard withholding rate can fall short of your actual marginal rate, which can leave a gap you owe at filing even if you never sold a share. Understanding that gap before the lockup ends is the difference between a plan and a surprise in April.
Before the lockup lifts, it is worth working through, with your tax advisor, a short list: how concentrated your net worth will be in one stock once the shares are liquid; your cost basis and holding period for each tranche; how selling interacts with any withholding gap you may already owe; and what a disciplined, pre-decided selling schedule would look like, so the decision is made on a calm day rather than a volatile one. None of this is a recommendation to sell or to hold. It is a case for deciding on purpose.
We coordinate this with your CPA rather than around them, because the tax, the investment, and the plan are one problem, not three. This is general information and not personalized investment or tax advice.
The lockup date is on the calendar. Meet it with a plan.