Quick wins for a faster PC:
Repair Windows errors before they cause bigger problemsFix Now →Scan for outdated or missing drivers - takes under a minuteDriver Scan →An IPO lockup is a contract that limits when specified holders may sell, transfer, pledge or otherwise dispose of covered securities after a public offering. A private-company valuation is an estimate for a particular security, purpose and date—not a continuously quoted market price. The documents and tax rules control the answer in each case: one SEC-filed prospectus uses a 180-day lockup, while Internal Revenue Service guidance requires a reasonable application of a reasonable valuation method for Section 409A purposes.
This U.S.-focused guide explains what the restrictions cover, how to find the controlling language, why a funding-round valuation can differ from a 409A common-stock value, and which questions to ask before relying on either number. It reflects SEC and IRS materials reviewed October 13, 2026, and is general information rather than a determination of any contract, tax liability or share value.
As an Amazon Associate I earn from qualifying purchases.
What an IPO lockup actually does
An IPO lockup is a post-offering restriction written into agreements connected with the offering. It prevents the holders named in those documents from taking specified actions for the stated period unless an exception or waiver applies. The restriction is contractual; it is not a universal rule imposed for the same duration on every IPO.
The prospectus section usually titled “Lock-Up Agreements,” together with the signed lockup agreement when available, identifies the restricted people, the securities covered, the prohibited transactions, the start date and the authority to approve exceptions. A headline such as “the IPO has a 180-day lockup” is incomplete unless those details match the actual filing.
#1 Best Overall
- [Ultra-Lightweight Ear Buds Designed for Small Ears] Each earbud weighs only 3.7g and features a compact, ergonomic in-ear design made especially for small ears. Secure, low-profile, and comfortable for workouts, all-day wear or overnight sleeping.The ultra-slim profile sits flush in your ear with no hard edges poking or rubbing, so you can even sleep on your side without discomfort.
- [Immersive Stereo Sound with TOZO OrigX Technology] TOZO OrigX tuning delivers clear vocals, balanced mids, and natural stereo sound for music, podcasts, and videos.
- [Long Battery Life for Daily Use] Get up to 7 hours of playtime on a single charge, with up to 32 hours total using the charging case—ideal for workdays, commuting, and extended listening sessions.
- [Bluetooth 5.3 & Stable Connection] Bluetooth 5.3 provides fast pairing, stable wireless performance, and reduced dropouts as you move around home or office.
- [Deep Bass with Clear Vocals] High-performance drivers produce punchy bass while keeping vocals clean and detailed for everyday listening.
Who can be covered
Coverage depends on the documents. In the 2026 SEC-filed prospectus used as an example, the issuer is restricted and similar agreements are expected from directors, executive officers and beneficial owners of at least 5% of the outstanding common shares. That is one offering’s structure, not a definition of every IPO. A holder below a stated threshold, an employee with a different agreement or an investor whose shares are excluded may have different rights.
What transactions can be restricted
A lockup can reach well beyond an ordinary sale. The example filing covers offers and sales, contracts to sell or buy, options, pledges, lending and other transfers. It also addresses arrangements that shift the economic consequences of ownership and certain registration statements. The exact list and wording matter: a transaction that does not look like a cash sale may still be prohibited if it transfers control, economic exposure or the ability to dispose of the shares.
The 180-day example
The cited prospectus sets a 180-day period measured from the date of the prospectus for the issuer. It describes similar restrictions for directors, executives and certain large holders, subject to the agreement’s exceptions and any required underwriter consent. The number 180 is therefore a single-offering example, not a statutory minimum, market-wide average or guaranteed term. Another IPO can use a different duration, a different starting event or no lockup for a particular holder.
When the clock starts
Read the start-date clause rather than counting from the first day the shares trade. In the example, the clock runs from the prospectus date. Other agreements may refer to the pricing date, closing date, a merger completion or another defined event. If the document uses a defined term, follow that definition and check whether amendments or supplemental agreements change it.
Rank #2
- 【IP68 Waterproof Multifunctinal Smart Watch】Torjalph fitness activity tracker smart watch is IP68 waterproof technology ,you can wear it when swimming,handwashing,it's rain-proof which means that you perform multiple exercise modes outside without worrying about sweat or rain corroding your fitness smart watch,and this watch equipped with a 230 mAh large capacity battery magnetic charging ,and this sports activity tracker watch can be used 5-7 days If fully charged.
- 【Larger 1.83'' Full Screen Watch & Multi-dial Selection】1.83 inch full HD color touch screen smart watch for men / women provides excellent 240*284 resolution image quality ,This Bluetooth smart watch offers a better touch experience and remarkable immersion and ,more than 200 watch faces for you to choose from App"Da Fit ", you can change the dial style according to your mood to wear keeping the world on your wrist
- 【Accurate Activity Tracker Smart Watch 】sports watch activity tracker uses sweat and dust resistant breathable silicone strap, our Fitness Tracker Smart Watch for Android iOS Phones supports 12 sports modes,walking,running,bicycle,swimming,badminton,basketball,football,rope skipping. This bluetooth calls smart watch for men women is lightweight and stylish, bringing more convenient and relaxing sports experience while also providing more protection.
- 【Your 24 Hour Personal Daily Health Monitor】Fitness watch for women men full touch screen IP67 waterproof bluetooth smartwatch for Android iOS Phones with heart rate blood pressure monitor multifunction Andriod smart watch with steps counter sleep monitor sports fitness watch, monitoring blood oxygen saturation allows you to understand your physical condition in real time to track fitness progress ,to know your health status in time.
- 【More Functions Bluetooth Call Smart Watch】This fitness activity smart watch full screen for iPhone and Android phones includes a bunch of new features including:The bluetooth smart watch can hang up the phone, receive and display WhatsAPP /Text /Facebook /Twitter /Messenger reminder.Support sedentary reminder, alarm clock, stopwatch, timer,weather information,music control, remote camera control compatible with Android 5.0 and above or iOS 9.0 and above smartphones.
Exceptions and waivers
Lockups commonly contain carve-outs, such as certain transfers to affiliates, trusts, family members or recipients in an estate transaction, but the permitted categories are document-specific. The example also requires prior written consent from the underwriter for specified actions. Consent is not automatic: the agreement may give the underwriter broad discretion, impose conditions or permit a waiver for one holder without releasing everyone else.
How to determine whether you can sell after an IPO
- Find the controlling documents. Open the issuer’s prospectus and go to “Lock-Up Agreements.” Obtain the actual signed agreement or any incorporated form if the prospectus references one.
- Identify your holder category. Match your role, ownership percentage and entity status to the listed restricted holders. An employee, director, venture investor and affiliate may sign different documents.
- Identify the exact security. Check whether the restriction covers common shares, preferred shares converted into common, options, warrants or securities acquired after the offering.
- Read the prohibited-actions list. Look for sales, offers, contracts, options, pledges, loans, hedges, transfers and registration statements, not just the word “sell.”
- Calculate the contractual end date. Use the stated starting event and calendar convention. Do not assume the first trading day is day one.
- Check every exception and consent condition. An otherwise permitted transfer may require notice, a legal opinion or prior written underwriter approval.
- Confirm other restrictions. Securities laws, insider-trading policies, trading windows, Rule 144 requirements and a company’s equity-plan terms can still limit a transaction after the lockup expires.
Expiration removes the lockup restriction; it does not guarantee liquidity or a particular price. Market volume, the holder’s information, registration status and other legal requirements can determine whether a sale is practical.
Do not confuse IPO lockups with other uses of “lock-up”
The SEC’s Corporation Finance Interpretations discuss lock-up agreements in certain negotiated Rule 145 exchange transactions. That is a distinct transaction context from the post-IPO restrictions described in an issuer prospectus. The shared label does not make the rules interchangeable. Always identify the transaction and read the agreement governing it.
What a private-company valuation measures
A private company does not have a continuously observable exchange quotation. Its “valuation” is an estimate made for a stated purpose and valuation date. A financing price, an accounting fair-value estimate, a tax value for employee options and a headline value calculated by multiplying a preferred-share price by all outstanding shares can answer different questions.
Rank #3
- [Low Noise High Fidelity] New bee guitar cord with 22AWG oxygen-free-copper center conductors provides enhanced signal transfer, the PVC insulation material and the high-density stranded copper double shield provide noise rejection for quiet operation
- [Ideal for Choice] New bee 1/4 straight and right angle metal connectors, ensures a secure connection in any instrument, pedal, or amp jack. L shape great fro on stage guitar stands
- [Wide Compatible] Suitable for mixer, power amplifier, microphone, effector, decoder, equalizer, electoronic organ, electric guitar, electric bass and other electronic equipments. Widely used in the installation of smart home, karaoke speaker, professional stage audio, etc
- [Easy Disassemble] Making incidental repairs quick and easy! Very nice, flexible cable
- [Dont Hesite to Order] 24 hours customer services and professional technology team are standing by
Before comparing two figures, write down the purpose, date, security class or instrument, attached rights and restrictions, method, evidence and whether an IPO or change in control was reasonably anticipated. A number without those fields is easy to misread.
The Section 409A standard
For stock-compensation purposes, Internal Revenue Service guidance requires fair market value to be determined through a reasonable application of a reasonable valuation method, considering the facts and circumstances as of the valuation date. Internal Revenue Bulletin 2024-20 states: “The determination of whether a valuation method is reasonable (or whether an application of a valuation method is reasonable) is made based on the facts and circumstances as of the valuation date.”
The standard does not require a single prescribed formula. It requires a defensible method applied to the information available at that date. Relevant evidence can include company financial performance, forecasts, assets, comparable companies, recent transactions, market conditions, control considerations and the rights associated with the security being valued.
Do these 3 things before closing this tab:
1Scan for outdated or missing drivers - takes under a minute2Clear out junk files and repair common Windows errors3Fix the driver behind crashes, sound loss and screen glitchesWhy a funding valuation can exceed a 409A value
A financing round usually prices the security sold to investors, often preferred stock with liquidation preferences, voting arrangements, conversion rights and other protections. Employee options commonly reference common stock, which may lack those preferences and may remain illiquid. Different dates can also explain a gap: a financing may close after a major contract, product launch or market change, while a 409A report uses an earlier valuation date.
Rank #4
- Digital Family Calendar: BSIMB digital calendar wall touch screen puts an end to your chaotic life. Designed for busy families, the digital calendar keeps you organised and in step with your family. Assign different colours and tasks to each family member to make family scheduling easier and more intuitive.
- Easy Setup and Auto-Sync: Plug in, connect to WLAN and auto-syn your electric calendar in minutes. Digital wall calendar compatible with Google calendar, iCloud calendar, Outlook calendar, Cozi calendar and Yahoo calendar. Add events directly on the device or through the ecalendar app. Electronic calendar stays current whether you're at work or traveling—no manual updates needed.
- All-In-One Home Assistant: Smart calendar builds habits and encourage independence with personalised chores. Display daily meal plan to reduce the daily ‘What's for dinner?’ stress. To-do lists keep track of everything you want. Turning chores into valuable achievements with stars and rewards, making life easier and more enjoyable.
- Manage Anytime Anywhere: BSIMB electronic calendar for family stay connected with the powerful ecalendar app. Access and manage your digital wall calendar anytime, anywhere with free features like stars & rewards, photo screensaver, chore charts, meals plans, to-do lists etc. Electronic planner paid features like Magic Import tailor advanced tools for users with special needs.
- Stay in Touch with Loved Ones: Share photos or videos from your phone to electronic wall calendar with app, instantly update your life moment, and keep in touch with your family, especially those who are far away; you can also surprise your smart calendar digital wall by sending him a wish card; it's also great for keeping tech-illiterate elders in touch with the youngsters.
The IRS says the amount paid in a transaction is one factor in a reasonable method. It does not say that the latest round price automatically sets the fair market value of every class. Treating a preferred-share price as the common-share option price can therefore be an unsupported shortcut; the conclusion must account for the classes’ different rights, restrictions and expected liquidity. This distinction follows from applying the IRS valuation standard to securities with different economic terms.
Headline company value versus per-share value
A reported “$X billion valuation” often refers to the price paid for a preferred round multiplied by a capitalization measure. That headline can include option pools, convertibles or other instruments under a particular convention. It is not necessarily the price at which a holder could sell one common share, nor is it automatically the value used for payroll withholding or option grants.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.When a 409A valuation receives a rebuttable presumption
Internal Revenue Service materials from Internal Revenue Bulletin 2007-19 describe circumstances in which a valuation of illiquid startup stock is presumed reasonable. The valuation must be made reasonably and in good faith, documented in a written report, consider relevant factors and be prepared by a suitably qualified person. The treatment has eligibility limits, including situations in which an IPO or change in control is reasonably anticipated.
Recommended Free Tools
“Rebuttable” matters. The presumption can be challenged if the facts show that the method or its application was not reasonable. Meeting the conditions also does not predict an eventual sale price, guarantee a financing outcome or convert an estimate into a public market quote. It is a technical tax rule designed to address the reasonableness of a valuation used for Section 409A purposes.
Compare valuation figures on the same axes
| Comparison question | Why it changes the interpretation |
|---|---|
| Purpose | Tax option pricing, financing, accounting fair value and a headline company value can require different analyses. |
| Valuation date | Facts and circumstances are judged as of the relevant date; later events do not automatically rewrite an earlier estimate. |
| Security or instrument | Preferred stock, common stock, options, warrants and convertibles can carry different economics. |
| Rights and restrictions | Liquidation preferences, voting rights, transfer limits and expected liquidity affect relative value. |
| Method and evidence | Financial results, forecasts, comparable companies and transaction prices are inputs whose relevance depends on the method. |
| Expected liquidity event | An anticipated IPO or change in control can affect eligibility for the described presumption and the assumptions used. |
Compare two IPO lockup documents methodically
| Document feature | Questions to answer |
|---|---|
| Start date | Is the period measured from the prospectus date, pricing, closing or another defined event? |
| Duration | How many days or months apply, and are there separate periods for different holders? |
| Covered holders | Which insiders, directors, executives, affiliates and ownership thresholds are named? |
| Covered securities | Which shares, options, warrants or later-acquired securities are included? |
| Prohibited transactions | Does the language include offers, contracts, pledges, loans, hedges, transfers or registration statements? |
| Exceptions | Which gifts, affiliate transfers, estate transactions or other carve-outs are permitted? |
| Waiver authority | Who may give written consent, and what conditions or notice requirements apply? |
Practical questions for employees, founders and investors
If you hold pre-IPO shares
- Which agreement did you sign, and does it differ from the form summarized in the prospectus?
- Are your shares subject to a company trading policy or a separate contractual transfer restriction?
- Does an exception require underwriter consent, company approval or advance notice?
- After expiration, do securities-law resale rules or registration requirements still apply?
If you receive an option grant
- What valuation date and common-share value support the exercise price?
- Was the value prepared under a written report and by a qualified person?
- How close was the valuation to a financing, tender offer, anticipated IPO or change in control?
- Which preferred-share rights make the financing price different from common stock?
If you are comparing a company’s published valuations
- Are the figures for the same date and the same security?
- Is one a transaction price and the other a tax or accounting estimate?
- Does the capitalization calculation include options, convertibles or an expanded option pool?
- Were market or company events between the dates significant enough to change the conclusion?
Common mistakes and how to avoid them
Assuming every IPO uses 180 days
Only the cited 2026 prospectus example specifies 180 days. Verify the duration and start event in the filing for the offering you are analyzing.
Assuming a lockup covers every shareholder
Coverage follows the named holders and securities. A threshold, affiliate definition or separate employee agreement can change the result.
Reading “sale” too narrowly
Pledges, loans, options, hedges, contracts and transfers can be restricted even when no immediate cash sale occurs.
Using the latest funding price as the 409A value
The transaction amount is evidence, not an automatic answer. Class rights, restrictions and valuation dates must be reconciled under a reasonable method.
Calling the 409A presumption an unconditional safe harbor
The described presumption depends on a qualified person, written documentation, relevant factors and other conditions. It can be rebutted and may not apply when an IPO or change in control is reasonably anticipated.
Quick Recap
A concise decision framework
- Name the decision. Are you deciding when a transfer is permitted, setting an option exercise price, recording fair value or interpreting a financing headline?
- Freeze the date. Record the contractual start date or valuation date before comparing later events.
- Identify the security. Separate common, preferred and derivative instruments and list their material rights.
- Read the primary document. Use the prospectus and lockup agreement for restrictions; use the applicable IRS guidance and written valuation report for Section 409A analysis.
- Test exceptions and assumptions. Confirm consent requirements, anticipated liquidity events and the evidence supporting the method.
- Escalate individualized questions. A securities lawyer, tax adviser or qualified valuation professional can interpret a signed agreement or determine how the rules apply to your facts.
Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
