The AI gold rush is rewriting one of Silicon Valley’s oldest rules: don’t cash out before the IPO.
As massive pre-public tender offers become more common, particularly among high-growth AI firms, founders are navigating liquidity events far earlier than traditional wealth models ever anticipated and for Nicholas Garcia, CFP, Principal Wealth Advisor at Compound Planning, this shift is forcing a fundamental rethink of how advisors approach planning, risk, and technology in 2026.
Garcia tells InvestmentNews that the classic “build to IPO” model is no longer reliable.
“Traditionally, the startup model assumed a clear path for founders: build the company and get to an IPO (or acquisition) to realize the value for your personal finances. But that model has been changing,” he explains. “The post-2019 IPO window has become more unpredictable, leaving many companies to remain private.”
At the same time, AI companies are reaching unprecedented valuations while still private.
“We've also seen many companies, especially those in AI, very quickly reaching valuations that would have historically only existed on public markets. So, founders are sitting on significant, rapidly growing paper wealth without a predictable timeline for realizing it.”
Tender offers are filling that gap, fundamentally changing how and when founders access liquidity.
“For founders, they create an opportunity to take real risk off the table without waiting for an exit that isn’t always in their full control,” Garcia says. “When a founder’s net worth is almost entirely concentrated in a single private company, every financial decision is shaped by that constraint. Tender offers give them a way to separate their personal financial life from the company’s exit trajectory.”
He adds that this often improves long-term decision-making.
“What we’ve often seen is that founders who take partial liquidity through tenders become better long-term shareholders. They’re not watching the IPO clock because they have more financial stability, which frees them to focus on building rather than tying an exit to their personal finances.”
Despite the opportunity, Garcia says many founders mishandle these early liquidity events.
“The most common mistake is letting unstructured psychology drive the decision,” he says. “Some founders anchor on valuation and convince themselves that the offer undervalues the company… Others worry that selling before an IPO or exit signals doubt to investors, their board, or employees.”
Both reactions can lead to excessive concentration risk.
“When they’re the primary drivers, founders end up holding far more concentration risk than is financially rational for their personal situation.”
The right approach blends analysis with self-awareness.
“The founders who navigate these moments well aren’t the ones who ignore their instincts and optimize purely for tax efficiency. They’re the ones who run the numbers across multiple scenarios and then ask themselves how they’d feel about each outcome. You can believe in the company and still take some chips off the table.”
A more technical, but avoidable, mistake is poor planning around tax strategy.
“The third mistake is the most avoidable: going in without a plan. Which shares they should sell can matter enormously,” Garcia says. “Founders who don’t account for QSBS treatment, AMT exposure, or the timing of the sale relative to other income events often don’t know what they’re actually netting until it’s too late to change their decision.”
The scale of AI valuations is also changing how advisors must think about risk.
“When a founder’s private stake is already priced at public-market multiples, there could be a plateauing of valuations or resetting as the market environment changes,” Garcia explains. “Advisors who treat it as ‘we’ll deal with this at the IPO’ are behind the curve.”
He cautions that even strong AI fundamentals don’t eliminate downside risk.
“We’ve also seen this happen before. Some company valuations that looked entirely rational in 2021 were cut in half or more by 2023. The AI fundamentals today look stronger, but that’s not a reason to stop stress-testing concentration against a downside scenario.”
At the same time, the rise in tender offers creates a unique window of opportunity.
“A founder who can take partial liquidity through a tender now, at a historically high private valuation may be walking away with enough to meaningfully change their long-term financial picture. That’s true whether they have near-term cash needs or not.”
For advisors unfamiliar with tender offers, Garcia says the details matter, especially around tax treatment.
“The most important thing to internalize upfront is that what a client sells matters as much as how much they sell,” he says. “Two clients can participate in the same tender at the same dollar amount and end up with very different outcomes depending on share type, their exercise history, and their overall financial situation.”
He outlines a general framework:
But even that guidance depends on individual circumstances: "This hierarchy shifts based on each client’s AMT exposure, prior history, and their state tax situation.”
As tender offers become more frequent, Garcia says advisors must stop treating them as isolated events.
“Advisors should help founders treat each opportunity as if it might be the last one before an IPO that may or may not happen on any predictable timeline.”
That requires preparation well before a tender is announced.
“Advisors should have a standing equity plan in place… one that already maps out which shares to prioritize, what the tax picture looks like across different sale scenarios, and how proceeds would be deployed.”
Without that groundwork, outcomes suffer.
“Founders who go into a tender without that groundwork tend to either freeze or default to whatever their instinct tells them in that moment. Neither is likely to produce a good outcome.”
The compressed timelines of AI liquidity events are also exposing the limits of traditional wealth management infrastructure.
“The core problem with traditional infrastructure is that it was built for annual planning cycles,” Garcia says. “A tender offer gives founders a narrow window, often just a few weeks, to make a decision with long-term tax and financial implications.”
Static tools no longer suffice.
“Advisors working off static spreadsheets or PDFs sent after the fact aren’t set up to serve these clients well.”
Instead, real-time modeling is becoming essential.
“What advisors actually need is the ability to run live scenario modeling with founders in the room,” he explains. “A founder who can see the trade-offs modeled in front of them makes a more confident decision than one handed a document and told to think about it.”
Continuous monitoring is equally critical.
“By the time a tender window opens, an advisor already knows exactly where the client stands and what decisions are on the horizon.”
Looking ahead, Garcia expects AI-driven wealth creation to reshape client expectations—and quickly.
“The combination of AI-driven company growth and more frequent tender offers means both founders and employees are coming into meaningful liquidity earlier, and in larger amounts than previous generations,” he says.
That shift raises the bar for advisors.
“The firms that will win these clients are the ones that can show up prepared… Advisors who are still sending static documents and scheduling annual reviews are going to lose these relationships to firms that are operating differently.”
But technology alone won’t be enough.
“Founders and employees… aren’t just looking for someone to manage their equity event. They have questions about how to invest proceeds, whether to use their equity as collateral, how to think about estate planning, retirement, and, often, building generational wealth for the first time.”
Ultimately, Garcia says, the winning advisors will be those who can integrate it all.
“The advisor who coordinates across all those pieces and stays at the center of the client relationship is the one who builds value and long-lasting relationships.”
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