Something every founder & angel should be intimately aware of (but few are) is QSBS - Qualified small business stock If optimized you should be able to get most (if not all) proceeds from a startup exit tax-free There are some actions best done early so inform yourself asap Tweet added by Hadley @Hadley

Hadley

2 years

Something every founder & angel should be intimately aware of (but few are) is QSBS - Qualified small business stock If optimized you should be able to get most (if not all) proceeds from a startup exit tax-free There are some actions best done early so inform yourself asap

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Andrew Schwartz

@aschwartz_03

2 years

@Hadley Strong agree here. Still pay state tax if you have it.

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Hadley

@Hadley

2 years

@aschwartz_03 Fwiw some states like NY respect QSBS

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panda jesus

@cashpandajesus

2 years

@Hadley Best resources to learn before hiring acct?

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Hadley

@Hadley

2 years

@0xCuri0usCoat1 Lots of good info posted in this thread 👇

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Mash: Marketers for VCs

@SparrowStartup

2 years

@Hadley Any articles specifically you recommend reading on QSBS

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Hadley

@Hadley

2 years

@SparrowStartup My partner @timy0ung wrote up an article a couple years ago that is a great place to start

How Founders Can Pay Zero Taxes On Up To $10 Million

Qualified Small Business Stock (QSBS) allows founders and investors to potentially pay zero federal income tax on $10m or 10x on an initial investment if the five conditions below are met.

www.forbes.com

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Ryan Denehy

@DenehyXXL

2 years

@Hadley @bryce I'd argue most founders are aware of QSBS but many don't actually know how it works. Famous story of an NYC company who IPO'd and didn't realize they blew their QSBS exemption through a poorly-organized secondary early in the life of the company. Expensive mistake!

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Hadley

@Hadley

2 years

@DenehyXXL @bryce You’re probably right. Of course repeat founders who had a decent exit are always experts, often because they realized after the fact they could have better optimized

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Vinay Kuruvila

@VinayKuruvila

2 years

@Hadley You can only get up to $10M tax free with QSBS so for a founder with a meaningful exit, most of their gains would not be tax free.

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Hadley

@Hadley

2 years

@VinayKuruvila You can split into different entities and each gets 10m

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Sam Elliott

@samelliottsam

2 years

@Hadley Didn’t it get wrecked recently from Biden administration?

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Hadley

@Hadley

2 years

@samelliottsam Nope, alive and kicking

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Mani Mahadevan

@ManiMahadevan

2 years

@Hadley Here an overview on all the key things startup founders and employees should know about QSBS

QSBS: Qualified Small Business Stock Explained

Using a QSBS, or Qualified Small Business Stock Exemption, you can pay 0% federal and state taxes on your startup equity. Learn how here.

learn.valur.io

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🛸 Matt Verlaque

@MattVerlaque

2 years

@Hadley @readwise save thread

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Tom Harari

@tomharari

2 years

@Hadley Wrote about this here

The Generational

@_generational

2 years

Founders, investors, and early employees of startups and small businesses can make millions and pay almost nothing in TAXES by utilizing a loophole called QSBS. A thread on how it works:

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