How are you handling sellers who insist on a stock sale for QSBS reasons?
May 08, 2026
by a searcher from Carnegie Mellon University in Denver, CO, USA
Running into a situation where the seller's C corp qualifies for Section###-###-#### QSBS) and they're pushing hard for a stock sale to capture the gain exclusion. Totally understand the math on their side, potentially millions in tax savings.
But as the buyer, I'd much rather do an asset purchase for the usual reasons: stepped-up basis, no inherited liabilities, cleaner diligence. For this deal specifically, there is a pending litigation and that is already a red flag for a stock sale.
For those who've been here before:
- How did you bridge the gap? Did you gross up the price, or hold firm on structure?
- How do you think about the rep & warranty insurance angle when you're forced into a stock deal?
- Any creative structures (F-reorg, hybrid) that actually worked in a search fund context?
Would love to hear stories or frameworks you've used. Thank you in advance.
from Duke University in Denver, CO, USA
from Howard Payne University in Austin, TX, USA