Fueling Startup Growth Through Pro-Innovation Tax Policy  

Tax policy determines whether the next generation of groundbreaking companies is built in America. From biotech breakthroughs to AI startups, entrepreneurs rely on tax policies that encourage investment, support innovation, and reward long-term risk-taking.  

Venture-backed startups often spend years developing new technologies, creating jobs, and scaling innovative products before generating profits.  

Startups rely on investors willing to commit capital to high-risk, long-term opportunities. Smart tax policy fuels investment and accelerates innovation while making sure the next generation of industry-leading companies is built in the U.S.

Policy Priorities

Preserve Qualified Small Business Stock (QSBS): QSBS helps channel capital to innovative startups by rewarding long-term investment in emerging companies. The provision supports entrepreneurs, investors, and employees while helping startups compete for capital. 

• Who Benefits from QSBS? QSBS rewards the people who build innovative companies; founders and early employees who take significant risks to turn bold ideas into successful businesses. Founders often spend years working long hours for modest salaries, while early employees accept lower pay in exchange for equity and the chance to build something meaningful. When those companies succeed, QSBS helps ensure they share in the value they created. 

Maintain Current Treatment of Carried Interest: Long-term investment partnerships help provide the patient capital necessary to build innovative companies. The current treatment of carried interest supports investment structures that align investors with founders over extended time horizons. 

Preserve Competitive Capital Gains Tax Rates: Long-term capital gains treatment encourages investment in high-risk, high-growth companies and helps direct capital toward entrepreneurship and innovation. 

Preserve Immediate R&D Expensing: Research and development is often the largest expense for innovative startups. Immediate expensing gives startups more capital to hire workers, develop products, and bring innovations to market faster. 

Oppose Taxes on Unrealized Gains: Taxing unrealized gains would create significant challenges for founders, investors, and startup employees whose wealth is often tied to illiquid assets that have not been sold. 

Protect Startup Equity Compensation: Stock options and restricted stock units help startups attract and retain world-class talent, particularly when early-stage companies cannot compete with larger firms on cash compensation alone. 

Meet The Policy Expert

Bobby Franklin
President & CEO