Qualified Small Business Stock

Eton’s expert valuation services can help maximize Qualified Small Business Stock (QSBS) gain exclusion, ensuring compliance while unlocking maximum tax benefits.

Our QSBS Process

Day 1
Day 2
Day 8
Day 10
Forever
Information Collection
Valuation Modeling and Analysis
Draft Report Delivered; Client Review and Approval
Final Report Delivered
Audit Support

Our QSBS Advantage

At Eton, we recognize the unique challenges and opportunities associated with Qualified Small Business Stock (QSBS). Obtaining a professional valuation plays a crucial role in substantiating your corporation’s QSBS status, enabling you to confidently claim the associated tax benefits. With our deep industry knowledge, extensive experience, and commitment to excellence, we are the trusted partner for QSBS valuation services. Our professional valuation services are designed to ensure compliance with IRC Section 1202 (IRC§1202) requirements while helping you maximize the potential tax benefits of QSBS ownership. 

Focused

Our team at Eton Venture Services is well-versed in the intricacies of QSBS and is dedicated to providing accurate, defensible, and unbiased valuations that meet strict regulatory standards.

Tailored Approach

Our team of experienced experts uses a combination of proven methods and proprietary tools to deliver data-driven valuations, considering each company's financial performance, financing history, market trends, and comparable public and private companies.

Proven Track Record

By engaging our reputable and experienced valuation firm, you ensure compliance and maximize the financial advantages available. Our proactive approach not only protects your investment but also creates a strong foundation for your company's future growth and success.

Unparalleled Expertise

Founded by securities lawyers from top law schools / law firms and staffed with finance professionals trained by the Big Four and other prominent financial services firms, Eton brings intellectual and quantitative rigor unmatched by others.

"As a former Gunderson lawyer, I co-founded Eton to bring the precision, efficiency, and the obsessive client service of corporate securities law to business valuation. I'm especially proud that our worldwide team of Big 4 trained CFAs has adopted that client service mantra wholeheartedly.

Our entire focus is on delivering audit-defensible, rigorous, and timely valuations without the inefficient back-and-forth of other firms. Client service is our religion. We always go the extra mile to overdeliver for every client."

Chris Walton, JD
President & CEO
Eton Venture Services
Previously at Gunderson Dettmer / Stanford Law

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FAQs

What is Qualified Small Business Stock (QSBS)?

Qualified Small Business Stock (QSBS) is a type of stock in a C corporation that meets specific criteria outlined by the Internal Revenue Code (IRC) Section 1202. When a startup meets these requirements, investors and founders may be eligible for significant tax benefits upon the sale of their shares. QSBS can help incentivize investment in small businesses and support their growth.
For a company to issue QSBS, it must be a C corporation with gross assets not exceeding $50 million before and immediately after the stock issuance. The corporation must also meet the active business requirement, meaning at least 80% of its assets are used in the active conduct of a qualified trade or business. Additionally, the corporation must not be involved in specific excluded activities, such as professional services, finance, or oil and gas extraction.
To determine if your stock qualifies as QSBS, ensure that the issuing company meets the eligibility criteria outlined by IRC Section 1202. This includes being a C corporation with gross assets below $50 million and meeting the active business requirement. Consult with a professional valuation services firm, like Eton Venture Services, to help you determine if your stock is QSBS.
QSBS offers significant tax benefits, such as the exclusion of up to 100% of the capital gains on the sale of the stock, depending on the acquisition date. This exclusion is capped at the greater of $10 million or 10 times the taxpayer’s adjusted basis in the stock. Additionally, any remaining gain may qualify for a lower capital gains tax rate.
To qualify for the tax benefits associated with QSBS, you must hold the stock for a minimum of five years. This long-term holding period allows investors and founders to enjoy substantial tax savings upon the sale of their shares, incentivizing investment in qualifying small businesses.

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