Canva IPO: Tax and Investment Strategies for Your Stocks
Canva's leadership has publicly signaled that an IPO is coming, with the company's COO recently pointing to 2027 as a target. For many Canva employees, that means years of equity could soon become life-changing wealth. Whether you are a current Canvanaut or a former team member, now is the time to start planning for how best to manage your shares when the company goes public.
Strategy #1: Diversify with an Exchange Fund
If you’re like most Canva employees, your company equity probably makes up a large share of your portfolio. Once the company goes public, your first instinct will likely be to diversify. There’s a good reason for that, too. Keeping too many eggs in one basket is always risky, and a newly public stock tends to be especially volatile. However, selling all your stock at once could trigger a large tax bill all at once, eating away at your liquidity before you get a chance to reinvest it.
An exchange fund gives you all the benefits of diversification while deferring those taxes until later.
Here’s how it works:
First, you contribute your Canva equity to an exchange fund, pooled with other investors who hold concentrated positions in other companies.
In return, you will receive a portion of the diversified fund proportional to your contribution.
Because you contribute shares rather than selling them, the exchange does not trigger a tax. Your full investment remains intact.
When you’re ready to exit the fund, you will pay the deferred capital gains tax, but only after your investments have had years to grow untouched.
This strategy does come with trade-offs. Most exchange funds are structured as a private partnership. They typically have a minimum investment of at least mid-six-figures, and you have to wait at least seven years before exiting the fund. If you aren’t planning to make that kind of investment or you expect to need access before the seven years expire, this may not be the right strategy for you. But if you have a long enough horizon, this option can be a game-changer.
Strategy #2: Use a Section 351 Exchange
If you want to avoid the seven-year lockup of a standard exchange fund, a Section 351 exchange offers a workaround. As with the previous strategy, a Section 351 exchange works by contributing your concentrated stock to a pooled fund. However, in this case, you and your fellow investors would form a new exchange-traded fund (ETF) rather than a private partnership. This removes the seven-year lockup, giving you access to your investment much sooner.
The catch is that no single stock can make up more than 25% of your total contribution, and your top five holdings combined can't exceed 50%. For employees with a concentrated position in Canva, this strategy may be off the table. But if you already have a diverse set of investments, then a Section 351 fund might make more sense for you.
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Strategy #3: Give Back with a Donor-Advised Fund
If you’d like to support a charitable cause while reducing your taxes, a donor-advised fund (DAF) is another great option. To use this strategy, you will donate your Canva shares to a DAF, which sells them tax-free and holds the cash on your behalf. You can then invest the proceeds and recommend grants to your favorite charities on whatever timeline makes sense for you.
By using this strategy, you can ensure the full value of your donation will reach a cause you believe in without the IRS taking a cut. Plus, when you donate the shares, you will receive an immediate income tax deduction for their fair market value up to 30% of your adjusted gross income, with any excess carrying forward for up to five years.
Strategy #4: Generate Income with a Charitable Remainder Trust
If you’re planning to retire soon, a charitable remainder trust (CRT) can give you a steady income stream while still supporting a cause you believe in. Similar to a DAF, you will contribute your Canva shares to a trust, which will sell them tax-free and reinvest the proceeds. The trust will then pay you or another beneficiary for a set term or for life. When the term ends, whatever remains in the trust passes to the charity or charities you chose when you set it up. You also receive an upfront income tax deduction.
A CRT is irrevocable, so it only makes sense if you are comfortable giving up ownership of the underlying shares. But if you want to establish a long-term income while leaving a charitable legacy, a CRT can give you the best of both worlds.
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Strategy #5: Leverage Direct Indexing for Tax-Loss Harvesting
When you do sell your shares, direct indexing can help you minimize your tax bill. Instead of owning a full index fund like the S&P 500, direct indexing lets you buy the individual stocks that make up that fund. Because you own each stock directly, you can sell off anything that drops in value and use that loss to offset gains elsewhere in your portfolio. This can be a useful way to reduce your taxes when selling Canva stock for a profit.
Direct indexing works best if you are in a high tax bracket and expect to keep realizing capital gains for several years, since a lot of the losses tend to show up in the account's first two years. This strategy also comes with a higher minimum investment and higher fees than a plain index fund, so you’ll want to make sure that it fits your overall financial model before committing.
Strategy #6: Access Liquidity with Securities-Backed Lending
If you need cash quickly but want to avoid selling your shares, securities-backed lending lets you borrow against your equity. Because there is no sale, you won’t trigger any capital gains tax, and your portfolio stays fully invested. Lenders typically extend credit worth roughly 50% to 70% of the value of publicly traded stock pledged as collateral, and interest rates are usually variable, tied to a benchmark like the SOFR.
The biggest risk with this strategy is a margin call. If there is a drop in Canva’s stock, you could be required to add more collateral or repay part of the loan on short notice. Otherwise, the lender could sell your shares to cover the debt.
Regularly borrowing against your shares would generally be unwise. But if you need quick cash for a one-time major purchase like buying a home or covering a sudden expense, this can be a good way to access liquidity without selling any shares right away.
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Get Experience-Backed Help with Your Equity Strategy Today
With Canva’s IPO still on the horizon, now is the perfect time to plan your equity strategy. But with so many moving parts, it can be difficult to decide what options work best for you. That’s where we come in."
At TrueWealth Financial Partners, we work with employees who are navigating equity compensation, tax planning, and diversification decisions just like these.
We can help you:
Coordinate your Canva equity strategy with your broader financial plan
Review your investments and optimize your portfolio
Reduce your taxes through tax-loss harvesting, Roth conversions, and capital gains planning
Create a retirement plan that will support you for years to come
Plan for long-term care and other protection needs for you and your family
Schedule a call with our team today, and we’ll be happy to talk through your options.
FAQs about Canva IPO
When will Canva actually go public?
Canva has not yet filed an S-1 with the SEC or confirmed a date for an IPO. However, leaders have pointed to 2027 as a possible target. COO Cliff Obrecht has said that the company is "fully IPO ready" but wants to finish its shift to an AI-driven business model first.
What happens to my shares when Canva goes public?
When Canva lists on a public exchange, your vested shares will convert from private company stock into publicly tradable shares. At that point, you can generally sell them on the open market after the initial lockup period expires, typically 90 to 180 days after the IPO.
How is Canva likely to be valued when it goes public?
Canva's most recent private valuation, based on an employee share sale, put the company at roughly $42 billion. That figure reflects private market transactions rather than a public share price, so the actual IPO valuation could come in higher or lower depending on market conditions at the time. Some insiders have stated that the real valuation is closer to $60 billion.
What should I be doing now, before Canva goes public?
Even without a firm IPO date, this is a good time to get organized. Understand your vesting schedule, know your cost basis, and think through which of the strategies above might fit your situation once your shares become sellable. A fiduciary financial advisor can help you choose the best strategy.