Compound helps startup founders and employees optimize their wealth through a technology-powered family office (tracking, investing, equity, lending, estate, tax). This lets our clients focus on their passions instead of administrative distractions. We live at the intersection of machine and tax code.
The cleanest path to financial freedom is to join an established company, perform well, invest wisely, and coast to retirement. Breakout startups propose a hack—an alternative career accelerated through learning, wealth, and reputation. Most startups fail, though, and provide no financial return. (Even if a startup fails, it can be great fun and provide a tremendous opportunity for rapid growth.) Picking the right company is hugely important; you will want to scrutinize every aspect of this decision to the best of your ability.
Conventional wisdom says that startup equity is worthless. While most startups fail, there’s a chance your equity will become a life-changing pot of money. This guide explains how to make the most of your equity.
For a startup employee, learning about your company’s initial public offering (IPO) is an exciting time. But it’s also overwhelming from a financial planning perspective. You have a variety of different equity grants, and you must decide what to do with each one. How many stock options should you exercise and sell, and when? What will your tax obligations be, and how can you minimize them?
Depending on your risk appetite, crypto may be an appealing asset class. You want to avoid trying to time the market and instead, create a long-term strategy based on your financial goals. That means going through a cash-flow planning exercise and building in a safety cushion to cover your expenses so you’re not forced to sell if there’s a market drawdown. When you think about managing risk across your portfolio, consider the relative volatility and liquidity of each crypto asset. You’ll also want to consider the security and regulatory risks that are unique to crypto as an asset class and how crypto fits into your overall exposure to digital assets.