OBBBA: The 2025 Big Beautiful Bill, Key Changes for Startups
Collated by Aparna Devalla, CPA
Curated by Rubric Financial
1 / 6
QSBS: The Headline Win for Founders
- §1202 EXCLUSION CAP INCREASED FROM $10M to $15M for QSBS issued after July 4, 2025. Per taxpayer, per company.
- 10x basis cap unchanged: exclusion is still the greater of $15M or 10x the taxpayer's adjusted basis in the stock.
- Holding period unchanged: 5 years from original issuance to qualify for the exclusion.
- Practical: founders incorporating now or raising priced rounds after July 4, 2025 benefit immediately. Founders with older QSBS (pre-July 2025 issuance) still subject to the $10M cap on those shares. Strategy: subsequent issuances (option exercises, follow-on grants) post-July 2025 get the new $15M cap independently.
Related Resources
The Income Tax Provision Under ASC 740
An overview of the ASC 740 income tax provision, covering deferred tax assets and liabilities, valuation allowances, and why unprofitable startups still record a provision.
Tax & ComplianceContractor vs Employee Classification (1099 vs W-2)
Learn the IRS criteria for classifying workers as contractors or employees, the tax implications of each, and the steep penalties for misclassification.
Tax & ComplianceSection 1045 Rollover: Selling QSBS Early Without Losing the §1202 Exclusion
How §1045 lets QSBS holders defer gain by reinvesting in other QSBS within 60 days. A critical exit-planning tool for founders who can't wait the full 5-year hold.
Related tools and reading
QSBS Qualifier
Check Section 1202 qualification and estimate federal tax savings.
InsightBookings vs. Billings vs. Revenue vs. ARR: The Four Numbers Founders Confuse
Bookings, billings, revenue, and ARR describe the same deal at four different moments, and mixing them up is the fastest way to lose credibility with a board or a diligence team. Here is what each one means, why they diverge, and which audience actually wants which.
GlossaryMoney Market Fund
Mutual fund holding short-term, highly liquid debt (T-bills, commercial paper, repos) targeting stable $1/share value plus yield.
InsightRevenue Leakage: Where SaaS Startups Quietly Lose Revenue (and How to Plug It)
SaaS startups lose a few percent of ARR every year not to churn or lost deals but to failed payments, under-billing, and process gaps. Here is where the money leaks and how to plug it.
GlossaryRPO (Remaining Performance Obligations)
The ASC 606 disclosure of contracted revenue not yet recognized: deferred revenue plus unbilled contracted amounts.
InsightQSBS Explained: A Founder's Guide to the Section 1202 Tax Exclusion (2026)
Qualified Small Business Stock can let founders and early employees exclude up to $15 million of gain from federal tax. Here is how Section 1202 works, what the One Big Beautiful Bill Act changed, and the mistakes that quietly disqualify your stock.
