More tech startups are expected to IPO this year–but stock option decisions are becoming more complicated for their employees

The IPO market has been lackluster for the past couple of years due to higher interest rates and a difficult public landscape. However, as sentiment has begun to shift, and more and more companies are either filing or predicted to IPO in 2024, many employees might find themselves asking these “What now?” questions.

An increasingly common scenario

While your company getting ready to go public is an exciting thing, there are a few important steps you should be taking to make sure that you aren’t leaving any money on the table.

The first and most important of these steps is to educate yourself about your current option package and what type of stock options you have. Some common misconceptions are that stock options mean you automatically own company stock, the company will exercise your stock options for you, or upon a liquidity event, your stock options will automatically convert to shares. This is typically not the case. For employees to own stock in their company, they will most likely need to pay to exercise their options.

Once you’ve educated yourself on what your stock options mean, you must determine if exercising these options makes sense for you and your financial goals. There are some cases where it may be more financially prudent to let your options expire rather than putting up the funds to exercise.

One such case would be if your option strike prices are far above the price at which the company is…