A person holds “concentrated equity” when he owns a large portion of company’s stock in various forms such as Employee stock purchase plan, restrictive stock or incentive stock options  and he is an employee of that company. It is imperative to know what type of stock one owns and also its cost basis (cost of acquiring such stock) to know their tax liabilities such as capital gains tax. Each stock has different tax payment structure and liquidity. One also ought to know the key dates. By owning concentrated equity, we are exposed to concentrated risks as well as the opportunity to grow as and when the company grows.  Read more at: http://www.financeandflipflops.com/managing-concentrated-equity-in-company-stock-and-stock-options/