YoungUpstarts

SEPTEMBER 27, 2017

In today’s start-up culture, it’s common for companies to offer employees the opportunity to own stock in the business. While most folks know the basic benefits of receiving stock, many employees are taken off guard by the tax implications that follow. Employees with ISOs have some specific tax benefits that other options lack.

Stock Options 124

Stock Options Stock Capital Gains Vesting 124

VC Adventure

AUGUST 15, 2018

It was a benefit to employees and a slight value transfer from equity holders to option holders (generally speaking in M&A transactions the value of the aggregate option exercise ends up allocated across the rest of the cap table).

Valuation 48

Valuation Common Stock Cap Table Software Review 48

Steve Blank

APRIL 11, 2018

Companies: In the 20 th century when companies competed with peers with the same business model, they wanted employees to help them execute current business models (whether it was working on an assembly line or writing code supporting or extending current products). Venture capital flourished when the tax rates plummeted in the late 1970s.

Entrepreneur 336

Entrepreneur Business Model Capital Gains Aggregator 336

ReadWriteStart

JANUARY 28, 2022

Dividends paid and capital gains realized on a per-share basis provide ordinary shareholders with a way to participate in the profits stream of the company. It is possible to participate in a company’s capital gains (losses) without purchasing its common stock if the owner of a warrant holds it for a lengthy period of time.

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Valuation Equity Warrant Common Stock 108

YoungUpstarts

DECEMBER 15, 2016

Companies are obliged to pay a portion of the payroll tax of their employees. On top of that, there’s the usual sales tax and capital gains tax to cover. The amount paid is then used to support programs such as social welfare and workers’ compensation.

Capital Gains 100

Capital Gains Bootstrapping Startup Analytics 100

Feld Thoughts

MAY 9, 2011

Make it simple – eliminate capital gains if an individual (who is an accredited investor) invests equity (i.e. risk of 100% loss of investment) in a private company with less than 100 employees.

Government 143

Government Technical Review Intellectual Property Accredited Investor 143

YoungUpstarts

FEBRUARY 12, 2018

So what’s the appeal of paying your employees using this form of cryptocurrency? First and foremost, federal and state law may not allow employers to use bitcoin to pay employees’ salaries. You could offer bitcoin as an optional benefit your employees could receive on top of their standard U.S. dollar-based compensation.

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Sacramento Charlotte Portland Employee 124

Startup Company Lawyer

MAY 13, 2009

The budget proposal would modify IRC Section 1202 to provide for a complete exemption from capital gains tax for qualified small business stock issued after February 17, 2009 and held for five years, and the amount excluded would not be added back for alternative minimum tax purposes. Current Law.

Capital Gains 47

Capital Gains Stock Small Business Redemption 47

YoungUpstarts

APRIL 11, 2018

If you don’t have a family successor, then you might have to look for a trusted and competent employee. Your succession plan might incorporate a path for the employee to buy the company over time. Just remember if you sell the company before you die, you may have to pay capital gains tax. Reason No. Reason No.

Small Business 160

Small Business Equity Denver Capital Gains 160

Gust

JULY 23, 2012

Donations of private stock enable investors, founders and employees to support charitable causes and contribute to the community while receiving simultaneous benefits in the form of substantial cash savings from reduced taxes as well as bypassing capital gains taxes. These assets often have a relatively low cost basis (e.g.

Stock 114

Stock Capital Gains Warrant Stock Options 114

www.payne.org

SEPTEMBER 22, 2011

Startup Equity For Employees. NOTE: If youre an attorney or tax accountant with experience helping startup employees with stock and option issues, drop me a note. The preferred stock held by investors has (as the name implies) more rights and privileges than the common stock issued to employees. From Payne.org Wiki. 3 Dilution.

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Equity Employee Vesting Preferred Stock 56

The Equity Kicker

NOVEMBER 7, 2012

reduce capital gains tax for assets held for a long period. give capital gains tax breaks to entrepreneurs. Support the venture capital system with direct investmemt into funds. Allow startups employees to trade employment protection for equity. the sort that develop empowering innovations).

Capital Gains 123

Capital Gains Government Venture Capital Equity 123

Gust

JULY 31, 2012

Typically, angel-funded companies that are going sideways have 1-10 employees and sufficient revenues and earnings to be sustainable, but are not attractive acquisition candidates to larger companies. Current US tax regulations stipulate capital gains tax rates for most angel investment with positive returns.

Exit Strategy 135

Exit Strategy Angel Investor Capital Gains Startup 135

Cracking the Code

OCTOBER 12, 2012

This post is a translation of the article: « Pigeons » : le cri d'alarme d'un fonds américain published on LaTribune (12/10/2012) and is a response to the proposed tax law proposed by the government of Francois Hollande, suggesting to tax all capital gain at the same level than salaries or 60%.

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France Europe Capital Gains Dilution 71

www.seriesseed.com

DECEMBER 9, 2012

Long term capital gains possible for early exit. It would be helpful to get a California standard employee manual, employee contract/agreements, IP ownership release to company, and confidentiality. it is acquired) and (b) the employee is terminated without cause (or sometimes resigns for good reason).

Finance 40

Finance Term Sheet Vesting LLC 40

Board Effect

APRIL 21, 2021

Do nonprofits pay taxes on capital gains on donations? Does your nonprofit hire employees? If you’re ready for some board discussions around nonprofit tax laws, the following questions make good topics for board education: Do nonprofits pay property taxes? What do nonprofits pay taxes on? Do nonprofits pay taxes on dividends?

CPA 52

CPA Government Dividend Capital Gains 52

This is going to be BIG.

APRIL 4, 2021

They make money off of equity and stock option gains, as well as investment partnership interests that are taxed at lower capital gains rates. Many companies found that their employees worked just as productively at home—especially for those who had any childcare needs taken care of—and they’re happier not having a commute.

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Both Sides of the Table

NOVEMBER 4, 2009

Now … these are stock options and not restricted stock so you’ll likely be taxed at a long-term capital gains rate. He’d be employee number 3. And let’s say that it took 4 years to exit – that’s $31,250 / year. In California that averages around 42.5%

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Startup Company Lawyer

JULY 20, 2009

Hiring employees or third party contractors. Although I’ve run into a situation where the former CEO of a Fortune 500 company personally paid an “employee&# out of his own pocket for a year prior to incorporation while incubating an idea, most founders will need to incorporate a company if they intend to hire employees.

IP 67

IP Stock Options Preferred Stock Capital Gains 67

Bryce Dot VC

APRIL 20, 2015

Independent businesses should provide equity or equity-like profit sharing to all employees that should be reported in percentage of company/profits vs. number of shares. Independent businesses provide a real time view into companies financials and make that available to all employees.

Equity 40

Equity Capital Gains Bootstrapping Distribution 40

David Teten

AUGUST 20, 2019

Taxable as ordinary income , unlike traditional VC which is normally taxed as long-term capital gains. Potentially harder to recruit employees. Any multiple above 3X is still very healthy and will put you well into the top quartile of VCs. . This means that a 2x return on paper can shrink to a 1.5x return after-taxes.

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Revenue SBIC Cofounder Venture Capital 60

The Startup Lawyer

JANUARY 19, 2010

2) receive long-term capital gains treatment for taxable gain at the stock sale (instead of ordinary income tax rates). Only employees of the startup can receive ISOs. ISOs must be nontransferable and can only be exercised by the employee. The main requirements are: ISO Recipient. Continuous Employment.

Stock Options 40

Stock Options Stock Capital Gains Employee 40

paulgraham.com

SEPTEMBER 23, 2012

Growth is why VCs want to invest in startups: not just because the returns are high but also because generating returns from capital gains is easier to manage than generating returns from dividends. Growth explains why the most successful startups take VC money even if they dont need to: it lets them choose their growth rate.

Startup 111

Startup Technical Review Software Review Acquisition 111

David Teten

SEPTEMBER 2, 2017

While both the average founder and the average senior partner own 21 percent of their management firm, only the former takes home an equivalent portion of the firm’s carried interest the capital gains investors share with management companies. – Employee and investor noncompete/nonsolicitation. name of the Fund).

Private Equity 60

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K9 Ventures

NOVEMBER 21, 2011

2) Fairness to other early employees in the company : This is a very critical and important point, that is often overlooked by founders. In most situations that I have come across, the founders usually have a significantly longer tenure working at the company than even the earliest employees and so a founders-only cut-off is acceptable.

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Founder Common Stock Preferred Stock Stock 87

K9 Ventures

NOVEMBER 21, 2011

2) Fairness to other early employees in the company : This is a very critical and important point, that is often overlooked by founders. In most situations that I have come across, the founders usually have a significantly longer tenure working at the company than even the earliest employees and so a founders-only cut-off is acceptable.

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Founder Common Stock Preferred Stock Stock 84

Start Up Blog

JUNE 6, 2019

A world where big companies, small companies, freelancers and employees can all thrive. But in order for us to have a future we want to live in, we need to adjust the guardrails of capitalism so that it doesn’t end up as a new kind of technology feudalism. Both income taxes and capital gains taxes.

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Government Algorithm Artificial Inteligence Social Media 79

Up and Running

APRIL 29, 2014

Oftentimes, the example is, in your business you have an employee. Now as a business owner, you take two hats and put both on sometimes simultaneously, one as the investor and owner of the business, and the other area is as the employee of the business. They get injured on the job. Yes, you have insurance. Let’s be honest here.

.Net 85

.Net Capital Gains Distribution Puerto Rico 85

Ben's Blog

APRIL 7, 2021

Non-competes are contracts between employers and employees that prohibit employees from leaving to join competing companies, often for a specific period of time. Non-solicits are the same, but prohibit former employees from recruiting others they may have worked with at a given company to join them at a new company.

Silicon Valley 36

Silicon Valley Non-Compete San Francisco Government 36

This is going to be BIG.

NOVEMBER 21, 2021

There were about ten indie coworkers from the original community and ten employees of this startup. What we realized was that while our coworking crew all self-selected to join this communal space, the employees of this startup were just kind of dragged along by the founder and told to work here.

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Community Engineer Cofounder Capital Gains 103

This is going to be BIG.

NOVEMBER 15, 2020

There was what seemed like an endless stream of bombshell announcements for four months: Alphabet’s Waymo unit filed a lawsuit against Uber claiming that a former Waymo employee, Anthony Levandowski, stole secrets related to autonomous vehicle technology. They got worse. Unfortunately, she did it while being female.

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Cofounder Founder Employee Silicon Valley 218

Both Sides of the Table

AUGUST 30, 2010

And the tax changes for 2011 could cause a further end-of-year sell-off: Another factor often not discussed is that the capital gains tax increases coming into effect in 2011 are might just lead to a stock market sell-off in Q410 as investors “lock in” gains at a lower tax rate.

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Entrepreneur Technical Review Balance Sheet Government 298

YoungUpstarts

OCTOBER 22, 2019

For example, when it comes to something like your employees , it’s not just about productivity, but it’s about ensuring their well-being is catered for. Because there are some funds that are taxed at capital gains rates , which can be upwards of 20%. But this is down to you to ensure your knowledge is sound.

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Portfolio Due Diligence Stock Options Stock 113

Both Sides of the Table

JANUARY 2, 2016

They get to have “long-term capital gains” taxes which are much lower than short-term capital gains taxes paid by people who have stock options or income taxes paid to workers. We invest large sums of our after-tax money into our funds and this gets a long-term capital gain tax rate when we make a profit.

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Dividend Silicon Valley Capital Gains Stock 150