Unicorn Layoff & Employee 401K IRA Rollover

The rollercoaster ride of being in a tech startup can be exhilarating. Employees all have a ticking desire to change the world with energy and buzz in the work place atmosphere. Although the ups are good, the downs have some rough turbulence on employees.

Startups are like rocket ships, after a few booster engines the accelerated growth starts to slow down. During economic down turns, excess growth may lead to layoffs. Recently we see unicorn startup companies with billion dollar plus valuations layoff top notch talent such as CoinBase, Carvana, RobinHood, and more tech layoffs.  Because of layoffs, employees have decisions regarding 401k and private stock ownership.  Should I roll over my old 401k?  What about my private stock?  Is there any value left?

A benefit of a layoff is the ability of rolling over an old 401k. This opportunity is only given when you leave an employers 401k. The benefit of rolling over a 401k to an IRA or Roth IRA are some of the many options available when leaving a company.

Another benefit of a layoff is the option of selling company stock. Lots of unicorn companies and founders have large positions of stock. As seen from 2020 to present 2022, private stock to IPO has down side risks. During a layoff, its important to analyze these risks. Below is a picture of CoinBase IPO and it’s employee risk in a down trend.

Another example of employee stock risk with RobinHood.

Carvana stock risk example.

Being on a rocket ship unicorn company has some bumps on the journey. Along the journey, layoffs happen. Also, employees have the option to rollover 401k accounts and manage liquidity of private stock.  Layoffs are an opportunity to review your financial goals. Contact us today to review your goals and risks.

Copyright © 2022 All rights reserved. No part may be reproduced, altered, or copied in any form without written consent. Information contained herein is for informational purposes only and should not be construed as an offer, solicitation, or recommendation to buy or sell securities, or personalized investment, tax or legal advice. The information has been obtained from sources believed to be reliable; however no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the stocks they discuss. The information and content are subject to change without notice. Treveri Capital LLC is a California registered investment advisor. For information about Treveri Capital LLC’s, please consult the Firm’s Form ADV available at www.adviserinfo.sec.gov