What should founders organize with a multifamily office before a major liquidity event?
Before a sale, merger, or IPO, founders should organize ownership records, tax documents, estate plans, liquidity needs, risk controls, and a decision process for new wealth. A multifamily office can coordinate these workstreams with attorneys, accountants, bankers, and investment professionals so choices are documented before transaction deadlines narrow them.
Build one verified ownership file
Collect the cap table, stock purchase agreements, option and restricted stock records, 409A valuations, shareholder agreements, loan documents, and prior transfers. Reconcile the records with company counsel. Identify vesting, lockups, repurchase rights, transfer limits, pledges, and shares held through entities or trusts. For a possible IPO, prepare financial, risk, compensation, and governance information early because these categories appear in the SEC’s Form S-1 requirements (SEC Form S-1).
Review tax and estate decisions before the deal
Ask tax counsel to confirm basis, holding periods, estimated payments, state residency, charitable plans, and whether the shares may qualify for qualified small business stock treatment. Section 1202 rules can exclude some gain when qualifying stock and holding requirements are met, but eligibility depends on detailed facts (IRS Publication 550). Review wills, revocable trusts, powers of attorney, beneficiary designations, and irrevocable trusts. Discuss proposed gifts or charitable transfers before a transaction is announced. Morgan Stanley notes that pre-IPO transfers may be more tax efficient when shares have a lower value, subject to professional advice (Morgan Stanley IPO process).
The best time to start a family office would be before your liquidity event or as your net worth is increasing at a pace where it is inevitable that you will reach a level of $50 million or $100 million+ net worth.
Turn proceeds into a written personal plan
Set a cash reserve target for taxes, spending, debt repayment, philanthropy, and near-term commitments. Separate money needed soon from capital intended for long-term investing. Write an investment policy that states liquidity needs, time horizons, risk limits, diversification rules, and who can approve exceptions. Include a plan for concentrated stock, lockups, private investments, insurance, cybersecurity, and family education. Keep a transaction calendar with signing, closing, vesting, blackout, filing, and tax dates.
Create a small decision team
Name the lead contact for the family, company counsel, tax adviser, estate lawyer, insurance adviser, and investment team. Define who may give instructions and how conflicts are handled. Use a secure document room, maintain version control, and record decisions. A multifamily office can coordinate specialists, surface missing information, and keep the founder focused on business and family priorities. This is educational planning, not legal, tax, or investment advice.
Related guides
- Multifamily Offices for Founders After an Exit
- Access to Alternatives Through an MFO: A Practical Guide for Families
- Cross-Border Families and Multifamily Offices: A Practical Guide