Client Success Stories

Navigating an Acquisition

How Mark and Sarah Maximized Their Equity in a High-Stakes Deal

The Situation

Mark and Sarah met while working at the same high-growth tech startup — he was a senior developer, and she a Director of Marketing. When the company announced it was being acquired by a public tech giant in a 50/50 cash-and-stock deal, their upcoming wedding wasn't the only major life event on the horizon.

Their equity suddenly represented a big, complex opportunity — and a potential minefield.

The Challenge

The acquisition posed several high-stakes questions:

• Should either/both of them exercise their ISOs and/or NSOs before the deal or wait?
• What would happen to their unvested equity?
• How should they plan around a mixed payout of stock and cash?
• What were the risks if the deal didn't close?
• Longer-term: would either/both of them stay post-acquisition, or head elsewhere?

With taxes, timelines, and future plans in the mix, they needed a clear decision-making framework — fast.

Our Solution

• Modeling multiple scenarios to compare pre- vs post-acquisition exercise outcomes
• Strategically exercised ISOs before the deal close given the stock-based deal component (and ability to get to a qualifying disposition)
• Leveraging a capital loss carryforward to offset capital gains from the cash portion of the deal
• Coaching on negotiation points for her new compensation package from NewCo
• Analyzing their OldCo unvested equity, and replacement grants from NewCo
• Preparing for deal closure timing and risk with backup plans for each outcome

The Outcome

• ✅ Select options exercised pre-deal, locking in a long-term capital gain and minimizing tax friction
• ⬇️ Capital loss carryforward helped them significantly reduce their tax liability
• 🔁 Unvested grants were replaced with equity in the new company, preserving upside
• 💼 Mark and Sarah stayed with the acquiring firm, securing meaningful retention bonuses
• 📈 50-50 payout was strategically planned for — cash was used for diversification, stock was held to achieve ISO qualifying dispositions