RSA Planning/Strategy

Having/creating a plan for your RSAs improves your decision making

Pre-Read: Key Questions This Article Answers

  • What key decisions do I have to make regarding my RSA grant?

  • What should I do if my RSAs are not typical or have unique dynamics?

RSA Planning/Strategy is Typically Very Easy

Unlike the other primary forms of stock comp (NSOs; ISOs; RSUs), planning for RSAs is typically quite simple. As noted in the RSA overview, RSAs are predominately only awarded in the very early stages of a company, granted to founders and the first few company employees.

At that point in time, the company FMV is typically miniscule, and nearly every RSA grant allows for 83(b) early exercise. As noted here, there are very compelling reasons and a higher attractive risk/reward for every founder/early employee RSA recipient to early exercise 100% of their grant when they receive it. All in, the strategy for an RSA grant is typically obvious: exercise 100% via 83(b).

If Your RSA Grant/Circumstances Are Unique

If your RSA circumstances don't conform to the vast majority detailed above, we recommend consulting a professional to help you consider the unique pro/cons of your situation and to align upon a plan/strategy. And as a potentially helpful reference, RSAs are similar to RSUs in most ways, so for your situation you may find that the RSU Planning/Strategy section to be helpful for reference and context purposes.

🔗 Restricted Stock Award (RSA)

🔗 RSA Taxation

🔗 QSBS Taxation Exemption

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