OBBBA: The 2025 Big Beautiful Bill, Key Changes for Startups
Written by Aparna Devalla, CPA
Curated by Rubric Financial
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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 & ComplianceQualified Small Business Stock (QSBS)
How Section 1202 allows startup shareholders to exclude millions in capital gains from federal tax, how the 2025 OBBBA changed the rules, and what your company must do to qualify.
Tax & ComplianceState R&D Tax Credits: A Founder's Guide to Stacking Federal and State Credits
Most states offer their own R&D credits on top of the federal §41 credit. State-by-state overview for the most-claimed jurisdictions and how to maximize total credit.
Related tools and reading
QSBS Qualifier
Check Section 1202 qualification and estimate federal tax savings.
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This week's funding environment shows strength at the mega-round level, with AI infrastructure and capital-efficient models commanding multibillion-dollar valuations. However, founders should note that this capital flow is concentrated in late-stage deals with clear unit economics or strategic customer commitments, not distributed across the venture ecosystem. Meanwhile, challenges around SaaS pricing, churn, and valuation velocity are reshaping how founders plan and forecast when raising now.
GlossaryQSBS (Qualified Small Business Stock)
Tax exclusion for gains on qualifying startup stock, up to 100% after 5 years (tiered from 3 years for post-July-2025 stock).
InsightThe Finance Stack for a Series A Startup: What to Run, What to Kill, What to Add
Series A changes what your finance stack has to do: board cadence, diligence exposure, multi-state payroll, and accrual GAAP expectations all arrive at once. Here is the stack by layer, what to kill, and what to add.
GlossarySection 174 (R&D Capitalization)
Rule that forced R&D capitalization from 2022; the 2025 OBBBA restored immediate expensing for domestic R&D (foreign still amortizes over 15 years).
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.
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