Tag Archives: employee stock ownership


Introducing the Wealthfront Single-Stock Diversification Service

When LinkedIn went public in 2011, the company had about 1,500 employees. Traditional private wealth managers were ubiquitous on campus in their efforts to sign-up the 50 to 100 early employees and executives who met their firms’ multi-million dollar minimums. Unfortunately, that was of little help to the 1,400 other employees at the company looking for support. At Wealthfront, we believe everyone deserves sophisticated financial advice. Today, we’re launching the service I wish the entire LinkedIn team could have had access to back in 2011. Introducing the Wealthfront Single-Stock Diversification Service. This service will help solve a critical problem for many that work at public technology companies: How to best diversify concentrated holdings in your company’s stock. Such holdings are […]

The Post-IPO Dilemma: Hedging Your Stock

If your company recently went public and your stock price has gone up significantly then you’re probably wondering how you can hedge your position. Unfortunately there’s nothing you can do while you’re still in the 180-day lock-up period. Most lockup agreements have extremely detailed restrictions included, designed to prevent almost any form of market participation with a security.  It’s too long to reproduce anything but a sample here, but it typically begins like this: In consideration of the Underwriters’ agreement to purchase and make the Public Offering of the Securities, and for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of each of [names of managing underwriters], […]

An Employee Perspective on Equity

Andy Rachleff, Wealthfront's President & CEO

A couple of days ago we wrote a post for company founders that describes our proposal for allocating equity to attract and retain outstanding employees.  We call it the Wealthfront Equity Plan. It’s equally important to take a look at the Wealthfront Equity Plan from the perspective of an employee. When a prospective employee is considering a job offer she should be concerned not only with the amount of options she receives when she joins a company but also how well she is going to be rewarded for outstanding performance. Back in April 2012 we wrote a blog post that listed the 12 questions you should ask about the options associated with your job offer.  All the questions focused on […]

Winning VC Strategies To Help You Sell Tech IPO Stock

It’s well known that 20% of venture capitalists’ portfolio companies generate 80% of their returns. What most people don’t realize is the same 80/20 ratio holds true for public tech investing. The imbalance is even more profound for tech IPO investing. We found that for companies that went public between 2002 and 2008, 21% of the companies generated 96% of the gains. Just like in venture capital, a majority of the companies that went public during this period (56%) turned out to be losing investments. Venture capitalists and professional public company tech investors train for years and collaborate with other talented partners to identify the 20% of the companies that generated 80% of the upside. Imagine how difficult it must be for tech employees to decide if they should […]

Real Data-Based Guidance On Selling Stock Post-IPO

Today, we’re releasing an analysis that suggests employees in IPO companies making decisions about how and when to diversify their portfolios should take into account whether the companies missed their first two earnings estimates. Companies that missed one or both of their first two quarterly earning estimates had a 70% chance of continuing to trade down in the three months after their lockups had expired, an analysis of 104 technology IPOs showed. The IPOs were from the years 2005-2011, the only years for which data is available. The conclusion could be an important touchstone for employees trying to figure out how rapidly to sell and diversify their portfolios after an IPO. If there’s only a slim chance that a company’s […]

Strategies For Selling Stock Post-IPO

Strategies for Selling Your Stock Post IPO

One of the most important and difficult decisions you’ll make after your company navigates a successful IPO and lockup period is when and how much of your stock to sell. After numerous Wealthfront clients asked the question, Jared Jacobs, one of the engineers here at Wealthfront, created a simulation to help employees at new public companies visualize different approaches to selling some or all of their stock. As far as we know, it’s the first publicly available simulator of its kind. [...]