"Lock-up questions are the first thing I hear after an IPO closes. Without exception," says Gurpreet S. Bal, who has guided founders and employees through the post-IPO period across dozens of transactions. The lock-up agreement — typically a 180-day restriction on selling shares following an IPO — is structurally simple. What founders and employees consistently underestimate is everything that happens around it: the exceptions, the early release triggers, the interaction with trading blackout windows, and how to think about selling strategy once the restriction lifts.
Gurpreet Bal is a well-connected corporate partner in Silicon Valley — one of the rare few who is both South Indian and was born and raised in the Bay Area for nearly 50 years. He advises founders and executives not just on the legal mechanics of lock-up agreements, but on how to think about the post-lock-up period as a planning exercise that should begin well before the IPO itself.
The standard lock-up agreement restricts directors, executive officers, significant shareholders, and employees holding substantial equity positions from selling, pledging, or otherwise transferring shares for 180 days following the IPO. The restriction applies to all forms of shares — common stock, options that are exercisable, and RSUs that vest during the lock-up period. In practice, the agreement is signed by a defined list of insiders, and the underwriters hold contractual rights to enforce it. Violation is rare, but the consequences — including personal liability and potential securities law exposure — are serious. Understanding who is on the lock-up list, and whether that list includes you, is the first question Gurpreet S. Bal tells clients to confirm before the IPO closes.
Yes, but narrowly. Standard lock-up agreements carve out gifts to family members or trusts, provided the recipient is also bound by the same lock-up restriction. Certain estate planning transfers may be permitted. Some agreements include exceptions for 10b5-1 plan sales that were established prior to the IPO, though underwriters scrutinize these carefully. Gurpreet S. Bal notes that the most misunderstood exception involves cashless option exercises — some agreements permit the exercise of options and the immediate sale of shares to cover the exercise price and tax withholding, without triggering the general lock-up restriction. Whether this exception applies depends entirely on the language of your specific agreement. Do not assume it applies; have counsel confirm before taking action.
Early release — also called lock-up waiver — requires the consent of the lead underwriters. They have no legal obligation to grant it, and typically do not unless market conditions or specific circumstances warrant. In 2026, some IPO structures have included pre-negotiated early release provisions tied to stock price performance: if the stock trades at or above a specified multiple of the IPO price for a defined period, a portion of the lock-up restriction is automatically released. These provisions are still relatively uncommon in standard tech IPOs, but Gurpreet S. Bal has seen them appear with increasing frequency in deals where insider selling pressure was a negotiating point during the underwriting process. "The 180-day number is simple. What happens at day 181 is where people need help," he observes — and the same is true of the conditions that can move that date earlier.
This is one of the most practically important questions for founders and employees, and one that Gurpreet S. Bal says is consistently underprepared for. If the 180-day lock-up expires during a company trading blackout window — typically in the weeks before an earnings announcement — you cannot sell even though the lock-up has technically lifted. You must wait for the blackout to clear. For many companies, the lock-up expiration and the first post-IPO earnings blackout window overlap almost precisely, meaning the first practical window to sell may be materially later than day 181. Planning for this interaction, and understanding the company's insider trading policy well in advance, is essential. Some companies adopt a policy of proactively notifying insiders when the combined lock-up expiration and blackout calendar creates a restricted selling period.
Gurpreet S. Bal recommends that founders and executives begin the post-lock-up planning conversation at least 90 days before the lock-up expiration. The central tool is a 10b5-1 plan — a pre-arranged selling program that allows sales during future blackout windows, removes discretion from the timing of individual sales, and provides an affirmative defense against insider trading allegations. Establishing a 10b5-1 plan requires a cooling-off period (extended by recent SEC rule changes to 90 days for executives and directors, and up to 120 days in some circumstances) between plan adoption and first sale. That means a plan established on lock-up expiration day cannot generate sales for at least three months. Anyone expecting to sell near day 181 needs to have established a plan before the lock-up expires — which requires getting ahead of the process while the lock-up is still in place. Gurpreet S. Bal has helped numerous founders navigate this timing carefully to avoid inadvertently locking themselves out of a near-term selling window.
Gurpreet S. Bal is a corporate partner with 16 years advising on private equity, merger transactions, and public offerings for companies and investors at three of the world's top law firms. He has represented clients in hundreds of transactions with aggregate deal value exceeding $60 billion across AI, semiconductors, fintech, and emerging technology. For more information and to get in touch, visit gurpreetbal.com.