Are DoorDash’s Employee Stock Options Eligible for the QSBS Exemption?

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When food delivery service company, DoorDash Inc., IPO’d in December 2020 (NYSE: DASH), it’s stock quickly jumped 85%.  The public float however did not include approximately 110 million shares held by employees through stock options, board members and convertible preferred holders.  

These shares were originally subject to a 180 day lockup period, however the Company decided to split the lockup period in half, resulting in many of these shares becoming eligible for trading on March 8, 2021.  The 110 million lockup shares would effectively double the public float, likely shifting the supply / demand dynamics of the stock in favor of buyers.  

The Company was founded in 2013, so early employees and investors may be holders of stock that qualifies as QSBS if the Company met the qualifying QSBS criteria and the shares met the 5 year QSBS holding period requirement after converting to actual stock (i.e. not options or other unconverted securities).

If you are a DoorDash shareholder or employee with stock options, contact us to discuss your potential QSBS situation.

This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.

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QSBS Expert was founded by a group of entrepreneurs, investors, accountants and lawyers who came together when trying to navigate a QSBS situation of their own. We quickly realized that the regulations left a lot of open questions and the publicly available information was confusing to sift through…so we thought that others may also benefit from having a “go to” resource for all things QSBS.