if he really did sell it for $5M, and assuming they didnt load him up with an earn out or an escrow (which is unlikely) then after taxes (because he was proly too dumb to do an 83b election) then he'll get hit with 35% federal, and probably about 10% state, depending on where he lives.
so that leaves him like $2.8M, and say he's conservative and invests in muni bonds, he'll get like 3.5% after tax every year, so that's like $100K per year.
of course, he would still want to buy a house and maybe a car, and depending on where he lives, that could eat up $1M or so, which would knock him down to about $60K a year in income, which is not bad, but not exactly a wealthy lifestyle.
if he really did sell it for $5M, and assuming they didnt load him up with an earn out or an escrow (which is unlikely) then after taxes (because he was proly too dumb to do an 83b election) then he'll get hit with 35% federal, and probably about 10% state, depending on where he lives.
so that leaves him like $2.8M, and say he's conservative and invests in muni bonds, he'll get like 3.5% after tax every year, so that's like $100K per year.
of course, he would still want to buy a house and maybe a car, and depending on where he lives, that could eat up $1M or so, which would knock him down to about $60K a year in income, which is not bad, but not exactly a wealthy lifestyle.
anyway, good on him.