Equity is Taxing
When are ISOs taxed?
Sale
What is the ultimate purpose of a 409a?
FMV --> Strike Price
What is the benefit of owning QSBS?
A break in capital gains tax upon sale
At what stage do companies tend to go through their first audit?
Series B
Have you done a 409a in the past?
I noticed that you’re coming to us with getting a valuation as your priority ...
When are NSOs taxed?
Exercise (Purchase)
Why is a lower FMV favorable?
Allows employees to purchase stock for pennies on the dollar
How long do you have to hold QSBS before you’re eligible to sell and receive the break in capital gains tax?
5 years
What feature of Carta is useful during an audit?
ASC 718
Do you offer the option to exercise early?
Just to dig into the details of your EIP …
When are RSUs taxed?
Settlement (Vesting)
If a company is issuing RSUs, what does that tell us?
They are late stage / planning to go Public soon
FMV is too high to issue options
Non US employees would be granted what type of options?
NSOs
What does it mean if a prospect does not have an HRIS platform?
What are the 3 most important things happening to the company that will affect your equity plan over the next 6-12 months?
I’d love to understand your upcoming priorities, would you mind sharing …
When are RSAs taxed?
Sale
What does DLOM stand for?
Discount for Lack of Marketability
What does it mean if an employee exercises early?
They are taking a leap of faith & acting on their belief that the company will succeed / increase in value
What should we do if a prospect does not have an HRIS platform?
Suggest the Start up Stack!
Is this the first time you’re issuing equity? Do you have equity promised to current employees?
I’d love to understand how your employees feel about their equity grants ...
AMT was previously known as ...
Millionaire's Tax
What % is DLOM typically?
20-25%
DAILY DOUBLE - If a prospect mentioned they have multiple investors on a single line item, what does that mean? What question should we ask them?
It means they have an SPV; we should ask who they worked with to aggregate folks into that single line item.
Why do VC firms prefer investing in C-Corps?
AoIs are more standard that Operating Agreements (LLCs)
Has anyone left due to feeling undercompensated?
I talk to a lot of companies who have difficulty communicating the value of their compensation (salary, equity, benefits) …