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I went through this 6 months ago. A few things I learned (applies to the US) The equity payout happened within a few days of the official close. It was a wire

I went through this 6 months ago. A few things I learned (applies to the US) The equity payout happened within a few days of the official close. It was a wire transfer. Understand that the public announcement is often different than the actual close. You are asking about equity but make sure you actually have that. I’m constantly surprised by people saying they have “stock” in a company when it’s only options. If you have actual equity, check if it meets the requirements for Qualified Small Business Stock (QSBS) If you have equity, you may not get all the payout immediately. Often a percentage of the purchase price of the company is held in escrow for some period of time usually 12 to 24 months, to handle various things that come up. Everyone who owns actual equity has that same percentage of their payout withheld. Depending on what happens you may not get any of that money. Even if you get it all payed out in 24 months time, no interest is paid If you have stock options, the acquiring company may just buy them out. Basically instead of you having to exercise your options, cut the purchased company a check to buy them, only to have the acquiring company cut you check for your shares, they just buy out your shares for the per share price, minus your strike price. The net financial result to you is the same, with less paperwork. This is not a decision individuals in the company make themselves. Its defined as part of the acquisition. If so this payment comes in via direct deposit like normal compensation. Depending on your situation consider using a CPA for your taxes for the tax year the acquisition occurs in. You don’t want to mess this up. Find a CPA that has worked with people who have had equity events. Most CPAs have never dealt with something like this. If you are high enough to have been part of due diligence you met the lawyers for your company. They can usually recommend a CPA who can handle it A few other thoughts: Fight the temptation to ask other people how they did in the acquisition. There will always be people that made more than you. If you learn specific numbers for others, you can try hard to not be jealous, but it can be corrosive. It’s better not to know. There are many good articles on managing a windfall. Read them and follow the advice that works for you

buildingmateri 5y ago
> Understand that the public announcement is often different than the actual close. Any sense on which normally comes first?
- billyhoffman 5y ago
  Depends on the company. We were acquired by a publicly traded company, and there are certain things companies can’t do right before they report earnings. So the public announcement wasn’t that we were being acquired but that the acquiring company had signed a merger deal with the intent to acquire us and that it would close on a specific date, which was roughly 3 weeks in the future. For us the order of events were: - One month of technical due diligence, one month of business/legal due diligence. Very few people in the company being acquired were involved. - A final week of paperwork, legal going back-and-forth on the actual terms of the merger and planning the announcement. - signed merger agreement - The very next day held a company all hands to tell everyone the deal had been done. High-level leaders at the acquiring Company were there to answer questions. Lots of very very very happy people, champagne toasts, etc. - very next day after that, public announcement of merger press releases etc. “close date” was roughly 3 weeks in the future. - until the close date we weren’t officially employees of the new company, because the merger hadn’t officially closed. We went about our business - Close date happened. On that day previous company ceases to exist and we are all new employees of the acquiring company. Wire transfer Happened that day for the equity. Permit for the stock options buyout happened about a week and a half later as part of our pay period.

buildingmateri 5y ago

> Understand that the public announcement is often different than the actual close. Any sense on which normally comes first?

billyhoffman 5y ago
Depends on the company. We were acquired by a publicly traded company, and there are certain things companies can’t do right before they report earnings. So the public announcement wasn’t that we were being acquired but that the acquiring company had signed a merger deal with the intent to acquire us and that it would close on a specific date, which was roughly 3 weeks in the future. For us the order of events were: - One month of technical due diligence, one month of business/legal due diligence. Very few people in the company being acquired were involved. - A final week of paperwork, legal going back-and-forth on the actual terms of the merger and planning the announcement. - signed merger agreement - The very next day held a company all hands to tell everyone the deal had been done. High-level leaders at the acquiring Company were there to answer questions. Lots of very very very happy people, champagne toasts, etc. - very next day after that, public announcement of merger press releases etc. “close date” was roughly 3 weeks in the future. - until the close date we weren’t officially employees of the new company, because the merger hadn’t officially closed. We went about our business - Close date happened. On that day previous company ceases to exist and we are all new employees of the acquiring company. Wire transfer Happened that day for the equity. Permit for the stock options buyout happened about a week and a half later as part of our pay period.