Critical side note, from a tax perspective: Be very careful with the suggestions to have the stock bought back by the company for a 10% or 20% discount off the price in the round.
I assume your 5% stake is common stock. The common stock valuation will not be 10% or 20% less than the preferred price in the round. It'll be more like a 75% discount.
What this means is that even if you have long term capital gains on the appreciation of the stock, that tax rate will (at best) only apply to the delta between the common stock valuation at the time of repurchase and the price at which you bought the stock.
The delta between the common stock valuation at repurchase and the price at which the shares are actually repurchased will be treated, for tax purposes, as an employee bonus. So, it will be taxed like employment income.
Just want you to be aware of what you're potentially getting into, from a tax perspective.
I assume your 5% stake is common stock. The common stock valuation will not be 10% or 20% less than the preferred price in the round. It'll be more like a 75% discount.
What this means is that even if you have long term capital gains on the appreciation of the stock, that tax rate will (at best) only apply to the delta between the common stock valuation at the time of repurchase and the price at which you bought the stock.
The delta between the common stock valuation at repurchase and the price at which the shares are actually repurchased will be treated, for tax purposes, as an employee bonus. So, it will be taxed like employment income.
Just want you to be aware of what you're potentially getting into, from a tax perspective.