What lessons have high-tech entrepreneurs learned from the recent stock market crash?
Entrepreneurs have learned how important it is to set some money aside to pay their taxes. A lot of times, entrepreneurs and their employees have the option to buy stock in their own companies at a reduced price. As soon as the entrepreneur exercises her option to buy stock, the IRS says that she has experienced a gain — even if she does not sell any of this stock. Some entrepreneurs have exercised their options, bought stock, and then watched the stock price plunge. In some cases the stock price dropped so low that the value of all the remaining shares was less than the entrepreneur’s tax burden. Entrepreneurs need to remember to sell the quantity of stock they need to pay their taxes. Don’t take risks with the money you owe the government. You can take risks with your own wealth, but don’t take risks with the money you owe the government. As soon as you exercise your stock options, figure out how much you owe the government. Sell the quantity of stock you need to acquire this tax mo
