The below graphic illustrates a PE fund acquiring the assets of an existing company.
The PE fund will then form a new corporation and contribute the assets at FMV to the corporation in return for newly issued shares of QSBS. Remember… this can only be done if the assets are under $50M and when contributing assets for QSBS the assets are valued at FMV. There are other strategies to take for example forming two corporations and contributing assets to both so they are both qualified.
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.