May 04, 2022 - 2:00 PM - 3:00 PM ET

Venable LLP

What Founders and Investors Need to Know About “Qualified Small Business Stock”

This event has already occurred.

Some consider it a tax loophole for the start-up and venture capital communities. Others view it as a legitimate tax incentive to encourage investment in small businesses. Regardless of your view, if you are a founder of, or an investor in, a start-up you need a basic understanding of “qualified small business stock” (QSBS). It can impact everything from choice of entity to exit structure. Do not assume that company counsel is paying attention to your QSBS status. Too often, the first time a founder or an investor learns about QSBS is from his or her accountant when reporting gain on a sale of shares that occurred the prior year. By then, it is too late – and you may have left millions of dollars on the table.

This presentation will discuss:

  • The requirements for stock to qualify as QSBS and the potential tax savings that result therefrom
  • Common mistakes companies and shareholders make that disqualify QSBS status
  • How QSBS benefits factor into the choice of entity decision between a C corporation and an LLC (and whether to convert an LLC to a C corporation post-formation)
  • Common planning techniques to maximize QSBS benefits


Michael Bloom, Partner, Venable LLP

Christopher Davidson, Partner, Venable LLP