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There’s no mention of Qualified Small Business Stock, QSBS. If you are early on, this is more important than 83b or early exercise although more difficult to ma

There’s no mention of Qualified Small Business Stock, QSBS. If you are early on, this is more important than 83b or early exercise although more difficult to manage. https://www.andersentax.com/services/for-private-clients/business-owners-and-entrepreneurs/qsbs https://www.andersentax.com/services/for-private-clients/bus...

aveshcsingh 9y ago
Excellent point, Chris. Founders should consider giving out RSUs instead of options for this reason. My understanding is that stock options do not count as Qualified Small Business Stock, however.
- CalChris 9y ago
  You have to exercise that option first and then you have stock. That it is subject to a repurchase agreement (vesting) is a separate matter. QSBS is hard to achieve but the reward is much greater than 83b. Basically formation needs to be engineered with QSBS in mind. And you have to be early, pre-$50M. And ....
j_s 9y ago
QSB seems to be circling back into the limelight recently here: What Is QSB Stock and Why Does It Matter for Startups? | https://news.ycombinator.com/item?id=15495873 https://news.ycombinator.com/item?id=15495873 (2017Oct;21comments) <- content is 2016Jul grellas >When you do qualify, the benefit can be up to $2M Ask HN: How do I minimize the taxes from selling my startup? | https://news.ycombinator.com/item?id=2502623 https://news.ycombinator.com/item?id=2502623 (2011May;52comments) >proceeds of the original and the new investment are treated as long term capital gains [...] if the proceeds stay in a QSB for more than 5 years, the whole thing is tax free Tell HN: 100% exemption for angel investors extended through 2011 | https://news.ycombinator.com/item?id=2018041 https://news.ycombinator.com/item?id=2018041 (2010Dec;16comments) >grellas: My two cents ...
- CalChris 9y ago
  It was created in 1993 but prior to 2009, it wasn’t worth anything. Now it’s worth quite a bit (thanks Obama!). https://static1.squarespace.com/static/5422fa91e4b09109bad5a2ee/t/59dfe60646c3c4f859b17021/1507845757071/chart12.png https://static1.squarespace.com/static/5422fa91e4b09109bad5a... http://www.founderscircle.com/what-startup-founders-and-employees-need-to-know-about-qualified-business-stock-qsbs/ http://www.founderscircle.com/what-startup-founders-and-empl...

aveshcsingh 9y ago

Excellent point, Chris. Founders should consider giving out RSUs instead of options for this reason. My understanding is that stock options do not count as Qualified Small Business Stock, however.

CalChris 9y ago
You have to exercise that option first and then you have stock. That it is subject to a repurchase agreement (vesting) is a separate matter. QSBS is hard to achieve but the reward is much greater than 83b. Basically formation needs to be engineered with QSBS in mind. And you have to be early, pre-$50M. And ....

j_s 9y ago

QSB seems to be circling back into the limelight recently here: What Is QSB Stock and Why Does It Matter for Startups? | https://news.ycombinator.com/item?id=15495873 https://news.ycombinator.com/item?id=15495873 (2017Oct;21comments) <- content is 2016Jul grellas >When you do qualify, the benefit can be up to $2M Ask HN: How do I minimize the taxes from selling my startup? | https://news.ycombinator.com/item?id=2502623 https://news.ycombinator.com/item?id=2502623 (2011May;52comments) >proceeds of the original and the new investment are treated as long term capital gains [...] if the proceeds stay in a QSB for more than 5 years, the whole thing is tax free Tell HN: 100% exemption for angel investors extended through 2011 | https://news.ycombinator.com/item?id=2018041 https://news.ycombinator.com/item?id=2018041 (2010Dec;16comments) >grellas: My two cents ...

CalChris 9y ago
It was created in 1993 but prior to 2009, it wasn’t worth anything. Now it’s worth quite a bit (thanks Obama!). https://static1.squarespace.com/static/5422fa91e4b09109bad5a2ee/t/59dfe60646c3c4f859b17021/1507845757071/chart12.png https://static1.squarespace.com/static/5422fa91e4b09109bad5a... http://www.founderscircle.com/what-startup-founders-and-employees-need-to-know-about-qualified-business-stock-qsbs/ http://www.founderscircle.com/what-startup-founders-and-empl...