Sweetening VC Secondaries with QSBS

In December 2023, the Venture Capital Journal examined whether 2024 would be the year of VC secondaries. A confluence of factors makes the timing ripe for such deals, and the expected deal activity is already panning out.

Secondary transactions are typically transacted at discounts to the fair market value, however the up to 100% capital gains tax exclusion offered by Qualified Small Business Stock (QSBS) can help offset a good amount of the lost gains. 

One recent secondary involved Primary Venture Partners selling a portion of one of its funds to StepStone Group.  This article explores how actions taken to proactively manage QSBS eligibility were critical to ensuring that the tax incentive benefits were realized.

Read the full article here.

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