On August 19, 2025, TiE SoCal hosted an insightful panel discussion on the One Big Beautiful Bill Act (OBBBA)—a tax reform designed to accelerate innovation, strengthen the U.S. startup ecosystem, and improve returns for early investors. Together, the panel unpacked how OBBBA changes the landscape for entrepreneurs and investors alike.
Key Takeaways:
1. QSBS Reform – Encouraging Startup Investment Through Tax-Free Gains
OBBBA expands and modernizes the Qualified Small Business Stock (QSBS) program, which allows founders and investors in small C-corporations to exclude capital gains when selling their shares.
QSBS applies only to stock in a C-corporation (not SAFEs, notes, or LLC/S-corps).
Holding period for exclusions is shortened:
• 3 years → 50% exclusion
• 4 years → 75% exclusion
• 5 years → 100% exclusion
Benefits can be multiplied (“stacked”) across founders, spouses, and trusts.
The company must have under $75M in gross assets at issuance (up from $50M, indexed to inflation).
2. Tax Incentives for Innovation and Growth – Boosting Startup Cash Flow
The bill restores and extends provisions that give startups faster deductions, stronger balance sheets, and more flexibility in scaling.
R&D expensing: Full deduction in the year costs are incurred (reversing the 5-year amortization rule).
Net Operating Losses (NOLs): Carryforwards can be used more flexibly, making startups more attractive for acquisition.
Bonus depreciation: 100% write-offs extended for equipment and technology investments.
Real estate cost segregation: Faster depreciation on facilities, freeing up capital for growth.
3. Impact on Startups and Investors – A More Attractive U.S. Ecosystem
Taken together, these reforms reduce risk for investors, improve liquidity, and make early-stage ventures more fundable.
Investors gain earlier access to tax-advantaged exits and higher effective returns.
Startups benefit from stronger cash flow and greater investor interest.
The U.S. startup ecosystem becomes more appealing to both domestic and international capital.
Summary
The OBBBA is designed to stimulate entrepreneurship by lowering the tax burden on startup investment, restoring favorable treatment of R&D, and accelerating deductions for growth. For founders, this means easier fundraising and better liquidity. For investors, it provides faster, larger tax benefits on successful exits. Collectively, it marks a significant step toward reinforcing the U.S. as the global hub for innovation and venture capital.
Veda Financial Investment Advisory @ Charles Schwab
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Disclaimer: This article is for informational purposes only and does not constitute investment, tax, or legal advice. Past performance is not a guarantee of future results. Investing involves risk, including possible loss of principal. Please consult with a qualified financial advisor before making investment decisions. Veda Financial and its advisors may hold positions in some of the securities or industries mentioned.
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