PactSafe Stock and QSBS After Ironclad Acquisition

Indianapolis, Indiana-based startup PactSafe was acquired by contract lifecycle management pioneer, Ironclad, on March 25, 2021. According to Crunchbase, the leading clickwrap transaction platform, PactSafe, had raised a total of $8.2 million in funding since 2012 from 8 different investment funds. Any individual owning stock purchased or received directly from PactSafe could be eligible for the QSBS 100% capital gains tax exclusion or the Section 1045 gain rollover. (Source: PR Newswire)

One factor we are sure of is the Company was incorporated in 2012; therefore, if you are a stockholder you could qualify for 100% in tax savings. Check out a few other details we have already hashed out for you below:

Corporation:  PactSafe

Description:  PactSafe is a contract acceptance platform for high-velocity businesses. By securely powering legal agreements that scale with their business, customers like DoorDash, Upwork, Angie’s List, BMC Software, and TiVO protect themselves from legal issues before they arise. (Source: LinkedIn

Incorporation Date:  Incorporated in December 2014 as a C Corporation, which is a qualified legal entity for QSBS

Liquidation event details (date, type, etc.): PactSafe was acquired by Ironclad on March 25, 2021 for an undisclosed price. 

QSBS Potential:  The Company is a technology-based security platform for e-commerce companies, which is a qualified QSBS industry. The Company was founded after 2010; therefore employees and early investors could qualify for the 100% QSBS exclusion. It is unknown when the Company went over the $50 million asset test, but is assumed they have not because the most funding that was received at once was $5.5 million in 2018. There is a strong likelihood that any stock issued in 2012 or later could qualify for QSBS, assuming no redemptions and the Company meets the active test.

If you obtained shares in PactSafe in 2012 or later, please contact us to evaluate your potential QSBS eligibility.

Why is QSBS important?

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

About QSBS Expert

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.