ROBS impact on investors

May 08, 2025

by a searcher from Columbia University - Columbia Business School in Scarsdale, NY 10583, USA

I am planning on funding my deal with ROBS and some outside friends and family capital. As I assess my search, and think about looking at bigger deals, outside capital will become more important. Has anyone here funded their deal with ROBS and outside capital? A ROBS means a C-corp so its not tax efficient for investors. Was this a big issue? A non issue? I would love to chat about this. Thanks!

Reply by a searcher
from Biola University in North Tustin, CA, USA

^redacted‌ I did a ROBS and was/is a real PITA with a lot of paperwork, some annoying limitations, and some ongoing expenses. I don’t know that I would do it again but if it’s the only option… One positive is that there is a QSBS capital gains tax exclusion under section 1202 of the IRS code for C-corps that could save you big time on an exit. Best of luck.

Reply by a professional
from University at Albany, State University of New York in Delray Beach, FL, USA

^redacted‌ I helped one of my clients fund their startup using ROBS and then took their company public. Outside capital wasn't an issue :)

+9 more replies.

Join the discussion