Making the most out of equity comp:

If you have RSUs, stock options, or other equity compensation, now is the time to get strategic. Here are 3 critical things to do before the Hinge Health IPO.

Hinge Health’s upcoming IPO could be a major financial turning point for you. But turning your equity into lasting wealth requires more than just watching the stock price.

Equity compensation comes with hidden tax traps, critical timing decisions, and complex rules that most employees only encounter once in their career.

For example, did you know that:

  • You may owe taxes on RSUs even if you can’t sell your shares yet?

  • Your stock options could trigger surprise taxes under Section 409A if valuations shift before the IPO?

  • Post-IPO gains might affect your AMT exposure, student loan payments, or even childcare credits?

We work with startup and pre-IPO employees like you to help you make confident decisions with your equity. Here are the 3 most important things you can do right now to prepare.

1

Know Exactly What You Own

Equity compensation can be confusing — especially if your offer letter included multiple types of stock.

Start by answering these questions:

  • Do you have RSUs, stock options (NSOs or ISOs), or both?

  • What is your vesting schedule?

  • When will you actually own shares?

  • What’s the estimated value based on the IPO target price?

  • What happens if you leave the company before or after the IPO?

Now layer in the technical stuff:

  • For stock options: If the exercise price is below the true FMV at the time of grant, it may violate Section 409A, triggering immediate taxation plus penalties.

  • 409A valuations can become outdated in the IPO run-up. If your company’s valuation is “grossly unreasonable,” it can cause issues with IRS compliance.

  • For RSUs: Unlike stock options, RSUs are taxed when they vest, not when you sell. And if vesting happens during the IPO, tax withholding (and planning!) becomes urgent.

Understanding your grants is the foundation of good planning — and we can help you decode the fine print.

Not sure how your equity works? Schedule a Free Call

2

Plan for Taxes Before Your Shares Vest or Settle

One of the most surprising parts of equity compensation is when the IRS wants its cut — and it’s often sooner than people think.

For RSUs:

  • RSUs are taxed as ordinary income when they vest, even if you can’t sell the shares yet (like during an IPO lockup).

  • This means your taxable income could spike, and you might owe taxes before you can cash out.

  • Most companies handle this via sell-to-cover or net settlement, but you may still owe more at tax time — especially if the shares rise after vesting.

For stock options:

  • If you have ISOs, early exercises or post-IPO sales can trigger AMT (Alternative Minimum Tax).

  • If you have NSOs, the spread between your exercise price and the stock’s value is taxed as compensation income.

Other surprises:

  • If your RSU payout is over $100,000, your company must deposit employment taxes the next business day.

  • Some employees may be under-withheld on RSU income — leading to an unexpected IRS bill come April.

A Tale of Two Clients

We worked with two clients who both held significant incentive stock options (ISOs) and restricted stock units (RSUs) at the same fast-growing tech company. That company eventually went public, but the financial outcome for each client was dramatically different—simply based on when they engaged with our firm.

Client A: Proactive Planning, Pre-IPO

Client A approached us several months before the company’s IPO. He had a large equity stake—millions of dollars’ worth of ISOs and RSUs—and knew an IPO was likely on the horizon, though the timeline wasn’t yet official. Working together, we developed an equity compensation strategy that balanced long-term upside, liquidity needs, and tax exposure.

One of the key decisions was to begin exercising ISOs before the company went public. Because the valuation was still relatively low, we were able to minimize the Alternative Minimum Tax (AMT) impact on that year’s return. More importantly, by exercising early and starting the holding clock, we positioned him to qualify for long-term capital gains treatment when the shares were eventually sold after the IPO.

The result? When the company went public, he was able to sell shares and realize approximately $5 million in value, while keeping a significant portion of the gain taxed at long-term capital gains rates—saving over $1 million in federal taxes versus ordinary income treatment.

Client B: Missed Opportunity

Client B was in a nearly identical financial and professional situation—same company, same types of equity grants, same IPO. We spoke with him before the IPO as well, but at the time, he wasn’t ready to move forward with planning.

He ended up hiring us after the IPO, when his company shares were already publicly traded. By that point, the opportunity for proactive planning had passed. Because he hadn’t exercised his ISOs pre-IPO, and didn’t want to wait another year to access the funds, he exercised and sold immediately—triggering ordinary income taxes on the full spread.

While he still walked away with approximately $4 million after taxes, we estimate that his total tax bill was at least $1 million higher than it would have been with pre-IPO planning.

The bottom line: Equity taxes are complicated. We’ll help you understand your exposure and create a plan so there are zero surprises.

Want to avoid an IRS surprise? Schedule a Free Call

3

Create a Post-IPO Strategy Now, Not Later

Once your shares are liquid, the big question becomes: What should I do now?

A good post-IPO plan answers:

  • Should I sell all at once, or over time?

  • How much should I set aside for taxes?

  • What are the risks of holding vs. diversifying?

  • How do I make sure this money supports my long-term goals?

Stock prices can swing wildly after an IPO.

Without a strategy, it’s easy to fall into emotional decisions — holding too long, selling too fast, or doing nothing at all.

We’ll help you build a custom equity strategy that balances:

✅ Tax efficiency
✅ Risk reduction
✅ Personal goals (home, sabbatical, etc.)
✅ Timing and diversification
✅ Big-picture financial planning

Your equity might be the biggest windfall of your career — don’t leave it up to chance.

Get a strategy in place before the IPO. Schedule a Free Call

Let’s Turn Your Equity Into a Long-Term Win

We specialize in helping startup employees navigate equity decisions with clarity and confidence. Whether you’re sitting on a big RSU grant, considering exercising options, or just want to know what to expect when the IPO happens — we’ve got your back.

It’s free to talk, and you’ll walk away with a better understanding of your equity, your taxes, and your options.