<prompt> Human: I have about 5k liquid assets... but Im worth 10m on paper due to being a shareholder of a small company. This figure is meaningless until we either a sell or b IPO. Im wondering if there are ways to diversify the risk while waiting for such an event. Anyone else struggling with the discrepancy of maybe being a millionaire and living off ramen?Edit: wow, thanks for all the responses, I didnt think this would get any attention. While Im generally very grateful for my situation, it can also feel very lonely and confusing. Its hard to ask people around me for advice because they all have their own motivations to suggest one thing or another. Im scared to talk publicly about diversifying selling some of my shares to investors doing share swaps because this can cause rumors and loss of confidence in our somewhat high-profile company.Edit 2: Great, it sounds like the action items are 1 talk to an investment banker 2 talk to a lawyer. Ill post an update with the results! Im happy to hear that Im not totally crazy for wanting to remove some of the risk and that there are options out there to do this. Ill also ask for a small raise at the next board meeting. Assistant: Lots of people have been there.Made and lost my first million this way.I dont know how tight you are with the major shareholders and the board but your first step should be to do some serious research about how this stuff works. And then talk to a good lawyer, and then talk to some investment bankers who can give you some options.Your lawyer should have some connections to investment bankers and your broker very definitely does. I use Fidelity, Ive found them to be very helpful with this kind of thing.I dont know what the current legal standing for LEAPs are but that might be the way to go. I havent had this problem for a few years but at the time the IRS hadnt finalized their policy. But the way it was working was pretty attractive. You could basically write a multi-year contract with an investment banker so they gave you a large fraction of the value of your stock in cash and they had the right to keep those shares 2 or 3 or 4 years later.But this wasnt a taxable event. Thats huge. Because if you sell your shares after IPO youre looking at a boat load of capital gains.The really nice thing about the LEAP was that you could chain them together into an potentially never ending series of LEAPs -- thus avoiding capital gains taxes on the original shares for a long time.Ive kind of over simplified that. The investment bankers will offer a range of up front payments and number of years. So this is like selling an options contract. You get paid some money up front. They guy buying the contract is making a bet about how much he thinks the stock will be worth in a few years. Depending on how much hes paid up front, at the end of the contract youll either keep all the money or keep all the money plus some fraction of the stock.You cant do this with a stand options contract. Options contracts dont run for mult-years.Are you sure that youre allowed to do any thing with these shares?I suspect that these shares are locked down by the company so that you can not sell or trade them.And about IPOs. They get complicated. Theres a complicated formula that sets the number of shares that can be sold every day for the first 90 days and you literally have to be on a pre-approved list to sell. Guess whos going to be on that list. Right, the people who put money in during the first rounds of funding and the underwriters, and the top execs.The underwriters almost always demand that the employee shareholders sign a new agreement that locks up their shares for at least 6 months after the IPO. Generally theyll tell you that if EVERYONE does not sign then they will not do the IPO. And your boss will tell you that if YOU dont sign then theyll fire you.If you decide not to sign they have the legal right to fire you.They do not have the right to take your vested stock.If youre a little fish, the underwriters will do the damned IPO no matter what you do.If youre a big fish and it sounds like you may be you should be working with your management to set up a deal.Human: Thanks! This is all way over my head, but I will bring up LEAPs with a lawyer. I hadnt considered the tax implications of my situation but my instinct is to just pay my fair share and not try too hard to get around it.  <response>: You are going to have millions in tax obligations.When I posted I didnt know that you are a founder.As a founder youre going to have all kinds of issues. The underwriters and any potential investors are going to look at how much skin you have in the game. Theyre not going to be happy with a founder who wants to cut-and-run. So theyre going to work on tying you in to the company for several years. And of course youre going to work on not having all of your eggs in one basket.Youve had your head down building a successful company and this is your first time. So its natural that a lot of this is new to you. But youre going to have to carve out some time and invest that in to sorting out your financial options. Thats really hard to do in your position but its critical. ...my instinct is to just pay my fair share and not try too hard to get around it.Thats the right answer.Paying huge tax bills means youre winning the game.Being a jackass and trying to avoid your obligations means, well, I guess it means youre a jackass.But that doesnt mean that you shouldnt consider the alternatives. Its a good time to start thinking about long term plans. A lot of us nasty filthy 1-ers are setting up charitable trusts and finding ways to give back.I think that the most amazing thing about having this kind of money is that you have way more options for making a difference in the world.One other thing about taxes, AMT can be crushing.The AMT as it was originally implemented may have been OK but its gotten to be pretty horrible. Its not been indexed for inflation. So even back in the late 90s there were a lot of Internet Millionaires who gave a huge amount of it back due to the AMT.You need lawyers who have deep experience in this area. And of course you should do homework before you start talking to them. Learning more about trusts is a good first step. 