Concentrated Stock & Equity Compensation
A single stock that's grown into most of your net worth is both a win and a risk. Dogpatch Wealth designs tax-aware diversification (direct indexing, staged sales, exchange and charitable strategies) for SF executives and founders.
What Is Concentrated Stock Risk?
Concentrated stock risk is what happens when one position grows into most of your net worth. It is a good problem created by a good outcome, but it is still a problem: a single company event, sector downturn, or regulatory change can erase years of gains. The win is real, and so is the exposure. The goal is to keep the upside you earned while taking the single-company risk off the table over time.
How Do You Diversify Without A Massive Tax Bill?
We rarely sell all at once. Instead we stage sales across tax years, pair them with harvested losses from a direct-indexed portfolio, use charitable gifting or exchange strategies where they fit, and time sales around lower-income years. The whole point of a plan is to avoid a single taxable event, so you reduce concentration gradually rather than paying the full bill in one year.
RSUs, ISOs, ESPP And Pre-IPO Shares
How we approach a position depends on how you got it. Vesting RSUs, exercised ISOs with their AMT wrinkles, ESPP shares, and pre-IPO equity each carry different cost basis, holding periods, and tax treatment. We map the specific lots you hold and build the diversification plan around the real tax facts, not a generic rule of thumb.
Coordinating With QSBS & Exit Planning
If your shares might qualify for QSBS (Section 1202), the planning changes, and the upside can be enormous. We screen eligibility early and, where it fits, coordinate trust-stacking strategies and exit planning before a liquidity event, so the diversification plan and the tax plan reinforce each other instead of working at cross purposes.
Our Process And Minimums
We start with a short call to see if we are a fit, then model your after-tax outcomes and build a multi-year plan you can actually live with. Dogpatch Wealth works with households generally starting around $1M in investable assets, and we frequently engage earlier with founders and executives approaching a liquidity event, where early planning matters most.
Frequently Asked Questions
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We rarely sell all at once. Instead we stage sales across tax years, pair them with harvested losses from a direct-indexed portfolio, use charitable gifting or exchange strategies where they fit, and time sales around lower-income years, so you reduce single-stock risk while keeping the tax bill manageable.
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Direct indexing means owning the individual stocks of an index in your own account instead of a single fund. Because you hold the underlying names, we can harvest losses on the ones that dip and use those losses to offset gains from selling your concentrated position, lowering the tax cost of diversifying.
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Yes. The whole point of a plan is to avoid a single taxable event. We spread sales over multiple years, offset gains with harvested losses, and use gifting, charitable, or exchange strategies where appropriate, so you reduce concentration gradually rather than paying the full tax bill in one year.
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When some holdings fall below their purchase price, we realize those losses and use them to offset the capital gains created when you sell your concentrated stock. Each harvested loss effectively lowers the net tax you pay to diversify, and unused losses can carry forward to future years.
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Dogpatch Wealth works with households generally starting around $1M in investable assets, and we frequently engage earlier with founders and executives approaching a liquidity event, where early planning matters most. The best first step is a short call to see if we are a fit.