RSUs

Private company RSUs can be rewarding but come with unique structures, tax challenges, and limited liquidity options. Here are the core points from the lesson:

• Most private RSUs are double-trigger, requiring both time-based vesting and a liquidity event, unlike public RSUs which are typically single-trigger
• Single-trigger RSUs in private companies can create tax issues if you owe taxes on illiquid shares you can’t sell
• Liquidity events like tender offers, IPOs, direct listings, or acquisitions are when real decision-making occurs, though each comes with restrictions like lock-up periods or partial sell limits
• IPOs typically involve a six-month lock-up period, while direct listings may allow earlier sales and fewer constraints
• It’s essential to plan for taxes—sell-to-cover elections may not fully satisfy tax liability due to lower default withholding rates on equity compensation

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