Experience using C Corp and pursuing QSBS for SMB acquisition?

April 26, 2024
by a searcher from Stanford University in Orlando, FL, USA
Has anyone made this decision in order to be able to take advantage of QSBS capital gains tax exemptions, vs. using a pass-through entity? Would love to compare notes with you if so. Considering this for business currently under LOI.
from University of Michigan in Detroit, MI, USA
So, fast growing tech company? QSBS may be your thing. Looking to buy and operate a standard SMB? Possibly not, especially when you factor in the additional costs of getting everything setup.
Ultimately, make sure you seek tax counsel before making this decision. Happy to chat further, if I can be helpful. Feel free to reach out here or by email at redacted
from The Johns Hopkins University in Gainesville, FL, USA
This is a really good example of the importance of having (and modeling!) a plan BEFORE you submit an LOI. Knowing your time frame is critical. Understanding discount rates and estimating yours is critical. Modeling your cash flows from startup to sale under both a C-Corp and a passthru scenario will help you understand the optimal course of action, subject of course to the limitations of your model.