Solutions
Founder & Concentrated Equity
Concentrated founder equity is the most common reason a family is told a trust is too complicated to administer. It is the case we are being organized to accept.
Descriptions on this page reflect a proposed service model. Opes is not chartered and does not currently provide fiduciary services.
Overview
Founders and early employees often hold the majority of their net worth in one illiquid position. Our proposed administrative model is designed to hold and account for that position without forcing a sale, a diversification mandate, or a change in investment advisor.
Where the complexity sits
- Qualified small business stock positions with holding-period and basis tracking requirements
- Grantor and non-grantor trusts funded before a liquidity event
- Option exercises, secondary sales, tender offers, and repurchase rights
- Rights of first refusal, transfer restrictions, and company consent requirements
- Valuation for reporting where no public market exists
- Coordination between the company, counsel, and the family's tax advisors
Proposed approach
How we intend to administer it.
01
Directed investment authority
Where the governing instrument provides for it, investment responsibility for a concentrated position may remain with an investment director or the family's advisor rather than with the trustee.
02
Documented acceptance
We intend to publish the information required to evaluate a founder-stock funding before a family or advisor invests time in drafting.
03
Event-driven administration
Tender offers, secondaries, and exercises are calendar events, not surprises. Our proposed workflows are built to track them with the family's counsel and CPA.
04
Continuity through liquidity
The administrative record is designed to survive the transition from private position to diversified portfolio without a change of trustee.
Working with the existing team
The company's counsel continues to advise the company. The family's estate-planning attorney continues to draft and advise. The CPA continues to handle tax reporting positions. Opes would provide the institutional administrative layer.
Related practices
Opes does not provide legal, tax, investment, or accounting advice. Whether any structure described here can be administered depends on the governing instrument, applicable law, fiduciary acceptance, and receipt of regulatory authorization.