The estimated 1,600 Twitter employees who hit it big in the social networking giant's IPO join a small but growing subset of tech sector elite investors. Many of the "rank-and-file" employees from Generation X and Y who are on the receiving end of Silicon Valley IPO sudden wealth face the enviable task of deciding how best to invest for long-term success.
Adam Nash, chief operating officer for Palo Alto, Calif.-based online financial advisory firm Wealthfront, said that in some respects, concerns are typical. "Most of our clients are under 40 so their questions center on what this windfall means for starting a family or buying a house," he said.
But the Gen X and Gen Y millionaires depart from previous generations in important ways: They often wonder whether IPO riches mean they can afford to take a year off to start their own company. "That's a very popular theme in Silicon Valley, and it reflects the needs of the next generation," Nash said.
The Wealthfront executive is in a good position to know the Twitter employee-investor mindset. Wealthfront is a venture-backed company run by a founder of Silicon Valley venture capital firm Benchmark Capital—Andy Rachleff. And many of Wealthfront's early clients have been Facebook employees. Nash also recently gave a presentation called "'Personal Finance for Engineers" to Twitter employees ahead of its IPO.
The so-called Start-up Generation is often described as fearless, educated and independent, which is as true in seeing an idea through capital formation as it is in their personal financial decision-making.
Don't expect them to play it safe with mutual funds, though many of these investors do use low-cost index funds for diversification.
(Read more: The entrepreneur's biggest risk may be retirement)
Coming of age during the financial crisis of 2008, a lackluster job market and an era of corporate scandals has made high-net-worth millennials gravitate to nontraditional assets to an unusual degree. They also show a deep-seated desire to funnel financial windfalls back into start-ups.