Strategize your divorce when you go public in Silicon Valley

Being involved with an IPO for a startup is no doubt stressful. There is a lot of money on the line and many entrepreneurs put their heart and soul into a company for years before it goes public. Founders will take great risks and work day and night to start a company.

Silicon Valley, of course, is exploding with startups going public like Facebook, LinkedIn, Groupon and Zynga. Stories about tech startups creating millionaires overnight abound.

But one issue with IPOs that is largely ignored is how they affect the personal lives of company employees, according a San Francisco law firm. When entrepreneurs spend all their waking hours on their startup, this no doubt puts strain on their personal live, including their marriage.

San Francisco divorce lawyers Heath-Newton, LLP can offer some helpful advice to those in Silicon Valley going through this kind of turmoil in their work and personal lives:

Proactively delaying settlement until an IPO occurs is a common strategic move for either the employee spouse or non-employee spouse, depending on the company in question, the predicted value of the stock upon the IPO event, the information available to estimate the value the future stock, and the other assets/debts of the marriage. Same factors apply if a spouse is actively pushing the case toward settlement before the IPO occurs.

‘Either way, when an employee of a company such as Zynga, Yelp, or Facebook is involved in or considering dissolution in California, his or her attorney should certainly be calendaring the date upon which the client’s employer expects to go public,’ [lawyer Robert] Kamin concludes.

Tim Wilbur

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