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Forbes
3 minutes ago
- Forbes
How The New QSBS Rules Affect Founders And Investors
Peyton Carr is a Personal Financial Advisor for pre- and post-exit founders, entrepreneurs, and UHNW families | Keystone Global Partners. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) ushered in a new era for qualified small business stock (QSBS), introducing the most significant tax changes to this framework in 15 years. For founders and investors, these updates, which include shorter holding periods, increased exclusion limits and broader eligibility criteria, offer exciting opportunities to optimize tax savings and liquidity strategies. Below, I will break down these changes and provide planning considerations to illustrate how founders and investors can effectively use the new rules. Overview Of The New QSBS Rules QSBS has long been a powerful tool for startup founders and early investors. Under the previous rules, holding QSBS for at least five years allowed for up to $10 million in federal capital gains tax to be excluded, or 10 times the investment basis, whichever was higher. However, the five-year holding period acted as an "all-or-nothing" barrier. Selling just one day too early meant losing all QSBS benefits. The OBBBA has modernized QSBS in critical ways, making it more flexible and attractive. Here's an overview of the primary changes: Now, QSBS offers partial tax relief sooner: • 50% exclusion after three years (15.9% effective federal tax rate) • 75% exclusion after four years (7.95% effective federal tax rate) • 100% exclusion after five years (0% federal tax rate, as before) This tiered approach removes the prior rules' rigidity, which enables earlier exits without forfeiting all tax benefits for QSBS acquired after July 4, 2025. The lifetime cap has increased from $10 million to $15 million per taxpayer, per company. Beginning in 2027, this limit will also adjust for inflation, adding even more value over time. The gross asset threshold for companies to qualify as a 'small business' has risen from $50 million to $75 million, allowing more startups, especially larger or capital-intensive ones, to qualify and issue QSBS to investors. This will also adjust for inflation starting in 2027. QSBS issued before July 4, 2025, remains under the old rules, while the new benefits apply to stock issued on or after this date. Managing pre- and post-OBBBA QSBS under these parallel systems will be crucial. For instance, you could have QSBS under the old rules for your Series A, and QSBS under the new rules for your Series B. Planning Considerations For Founders And Investors The new QSBS rules bring valuable opportunities, but they also require strategic planning. Here are some key considerations: The new three- and four-year exclusions provide more flexibility for investors who need early liquidity. Founders considering secondary sales or tender offers now have practical options to de-risk sooner. However, if possible, aim for the full five-year hold to optimize tax benefits. For example, if a founder sells QSBS stock valued at $15 million after three years, previous QSBS rules would have resulted in about $3.57 million in federal capital gains taxes using the 23.8% long-term capital gains rate. With the new system, the 50% exclusion reduces the taxable amount, resulting in an approximate 15.9% effective tax rate and a significant drop in federal taxes to roughly $2.39 million. If held for four years at roughly a 7.95% tax rate, the federal tax due would be approximately $1.19 million. The increased $15 million QSBS cap provides founders with large exits a valuable opportunity to minimize more taxes. Founders can consider strategies such as "QSBS stacking," where shares are gifted to family members or trusts to maximize the QSBS exclusions. Consider an investor with $60 million in anticipated QSBS exit value. If the investor keeps $15 million and gifts $15 million to three separate non-grantor trusts (one for each of their three children), the entire $60 million could potentially be excluded from federal taxes upon exit, provided the five-year holding period is met. If the shares are held for only four years, 75% of the $60 million would be excluded. At three years, 50% would be exempt. The $75 million gross asset threshold allows more startups to raise larger or later-stage rounds that might qualify for QSBS. However, it's important to carefully track compliance with the QSBS requirements during and after fundraising. For instance, a Series B round might qualify for QSBS under the new rules, whereas it might not have under the old rules. Option holders who exercise after July 4, 2025, will benefit from the new rules. Under these changes, the exercise date starts the holding period for tiered exclusions, creating value even on shorter timelines, such as three or four years before an exit. For startup founders who hold both stock and options, like many of our clients at Keystone Global Partners, this presents a significant opportunity to exercise and take advantage of QSBS tax benefits in just three years, when previously they may have thought the capital outlay and holding period of five years was not realistic. Advanced planning is essential to fully unlock QSBS benefits. Whether it's using gifting strategies, exploring Section 1045 rollovers for deferrals or aligning exit dates with key holding-period milestones, founders and investors should work closely with experienced tax and legal professionals. Final Thoughts I believe the 2025 QSBS tax changes will profoundly impact how founders and investors manage liquidity, plan exits and preserve wealth. By offering tiered exclusions, expanded caps and broader company eligibility, these rules encourage startup innovation while delivering significant tax savings. For founders, integrating these strategies into exit planning will help maximize their financial outcomes. The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation. Forbes Finance Council is an invitation-only organization for executives in successful accounting, financial planning and wealth management firms. Do I qualify?
Fast Company
3 minutes ago
- Fast Company
Climate tech startup Brimstone just lost a $189 million DOE grant—but it's building its first plant anyway
Last year, Cody Finke got game-changing news from the Department of Energy (DOE): his climate tech startup was in line for a $189 million grant to help build its first commercial-scale plant. The company, Brimstone, has developed a new way to make cement—one of the biggest sources of carbon emissions on the planet. The startup also makes smelter-grade alumina, a critical mineral that the U.S. currently imports. The team spent months going through the DOE's grueling evaluation process, from a 200-page application to a three-hour-long interview in front of a panel of 30 technical experts. After the DOE moved the project forward, months of negotiations followed. The grant was finalized in January, just before the inauguration. Then came the Trump administration. This summer, the DOE announced that it was pulling the funding, along with grants for more than 20 other projects working on industrial decarbonization and carbon capture. Brimstone is appealing the decision, since producing critical minerals in the U.S. is a priority for Trump. But the company is also moving forward with its plans to build its plant regardless of what happens with the government funding. 'Our belief has been from the beginning that our technology has to work without subsidies,' Finke says. 'And if it doesn't work without subsidies, then it probably isn't going to have the impact we want.' Tech built for the bottom line—not just carbon cuts Brimstone's technology tackles an industry that's notoriously hard to decarbonize. Cement production is responsible for around 8% of global CO2 emissions, or three times as much as the airline industry. That's not just because of the energy it takes to make cement, but because of chemistry: Typical Portland cement is made by heating up limestone, and that process releases CO2 from the rocks. The startup uses silicate rocks instead, such as basalt, which don't release CO2. If the new process runs on renewable energy, the result is zero-carbon cement. If it uses the mix of energy on the grid, the emissions reduction could still be as much as 75%. If it can be widely scaled up in the industry—which produces more than 4 billion tons of cement each year for everything from roads and bridges to homes—it could make a significant dent in global emissions. From the beginning, when Finke first started developing the idea with his cofounder as a grad student at Caltech in 2019, he calculated what could make it economically viable. The new process had a fundamental advantage—instead of making CO2 as a byproduct, it makes valuable materials that can be sold. Valuable byproducts The first plant will mine rocks that are especially high in alumina, which can be used to make aluminum. The process is fairly straightforward. The company crushes the rocks into particles, and then uses chemicals to extract calcium for making cement. (The calcium is heated up, and then milled with gypsum.) Other residue becomes the SCM (supplementary cementitious materials), another product that's used to make cement. Aluminum compounds are extracted separately. By making and selling more than one product from the same rock, all of the products—including the low-carbon cement—can be cost-competitive when they're produced at an industrial scale. The process is inherently more efficient. Right now, other companies make cement, alumina, and SCM separately, and start each process by mining and grinding rock. 'It's three separate instances of mining and grinding,' Finke says. 'We have one instance of mining and grinding, which means that we only have to develop a rock with a single quarry. We only have to have a single piece of equipment, and that piece of equipment can be larger, and then therefore benefit from economies of scale.' The company will mine seven times less rock for its products than the standard processes today. Strong demand While some other companies are making low-carbon alternatives to cement, Brimstone wanted to make ordinary Portland cement—the standard product already in use in the building industry. Brimstone's cement meets ASTM International's standards for Portland cement. It's exactly as strong and durable and capable of handling extreme temperatures or chemical exposures. The SCM and alumina are also the same as what's already on the market. 'We make the exact same products,' Finke says. 'Since these are all structural materials, we think that's really important—no one wants to take a risk on structural components.' Large customers already want to buy it. Amazon, for example, recently announced plans to reserve volumes of the cement and SCM from the upcoming plant. The tech giant recently went through rounds of third-party tests of the materials, proving that it met requirements for strength and other factors. Amazon has also invested in the startup through its Climate Pledge Fund. Since the first plant will be a demonstration plant, the initial cost of the products will be higher, but companies like Amazon are willing to pay a premium. There's strong demand, even as some companies are now less vocal about climate goals. 'There are certain companies that care deeply about green attributes, and there are certain companies that don't,' says Finke. 'I think that the number of companies have changed somewhat, but the number of meaningful companies has not really changed. We see that steadiness.' A careful funding strategy Brimstone has raised more than $80 million to date from investors including Bill Gates's Breakthrough Energy Ventures. As the team raised money, it never counted on the inevitability of government grants. 'These subsidies are sort of at the political whims of any one party, and we don't want our technology to be [subject to] political whims,' Finke says. 'We want to have a solid economic footing. And that means that we need to have a fundraising strategy that doesn't count subsidies until the dollars are in our bank account.' The DOE money was reimbursement-based, so funds would have been given out when the project hit certain milestones. It was also focused on funding for the final stages of building the plant. Because the company hadn't counted on that funding, it has money available now to continue working on the project. The company recently announced that it was partnering with a quarry in Oklahoma, Dolese Bros., after evaluating 23,000 different quarries across the country. The location of the new plant, called the Rock Refinery, is being finalized now. It plans to begin operations by the end of the decade. Looking ahead The company isn't disclosing its fundraising strategy, though it says it has investors in place to help it continue building. Of course, the grant could have helped the company move even faster. The company's policy team continues to work on its appeal for the grant. 'Smelter-grade aluminum is a critical material that the United States cannot make,' Finke says. 'The Trump administration is very interested in critical materials. And what we like to say is that if the Trump administration put out a grant for critical materials, we would have applied to that grant—basically the exact same project.' But the appeal process isn't delaying the current work to build the plant and plan for future growth. 'Subsidies would help our costs, absolutely,' Finke says. 'But if it's necessary to have those subsidies, it's not likely to scale globally.'
CNET
3 minutes ago
- CNET
How to Use Zoom's AI Meeting Summary
In a world of virtual calls, brainstorming and fast-paced work, I use Zoom's AI Companion to capture my message and keep me and my team informed -- particularly for those who, like me, struggle with time management. Founded in 2011 by Eric Yuan, Zoom launched its original service in 2013. The tech company's AI Companion was added over a decade later in September 2023 as a meeting, chat, mail and calendar integration. It was built as a "smart assistant" without having to leave Zoom and use another app. Zoom AI Companion is included in all of its paid plans -- prices start at $13.32 per month -- under Personal, Business, Education, Healthcare and Developer divisions. AI Companion is a toggle that can be switched on via Zoom. Once this feature is activated in your virtual call, Zoom will take notes in real time and share action items. If you're curious about Zoom's competitors, Google Meets now also uses Gemini for AI summaries of your calls, too. The tools are quite similar in that they both summarize meetings, help you write emails and chat with you thanks to the power of generative artificial intelligence (read our hands-on reviews of more gen AI chatbots like ChatGPT and Gemini on CNET's AI Atlas hub). How to get a Zoom call summary Summarizing meetings is one of Zoom's many AI-focused features. With the help of its AI Companion, you can turn your meeting into a summary, including the chat threads, as well as a list of next steps and an overall takeaway at the top of the meeting screen. Here's how. Step 1: During a live meeting, the host can enable Meeting Summary, which is automatically shared with the host and the meeting's participants through Team Chat. Note: An administrator must enable each feature via account and group-level settings. Step 2: Once the AI Companion is enabled, it can be used to answer questions about the meeting. If you're coming in late, chat with the AI Companion to get real-time responses that will catch you up to the discussion. Note: Each meeting attendee's software must be updated to the latest version. Step 3: Zoom also offers smart recordings that divide meetings into "chapter" by the topic discussed. Much like a table of contents, this breaks your meeting down easily and efficiently and can be shared and seen by others. Meeting summaries and questions are supported in 36 languages -- the AI Companion will automatically detect the main language spoken during the meeting, regardless of where you sit in the world. Of course, the usual caveats apply about making sure to double check it's got the details correct and pulled out the right things to make action points on. Zoom Benefits of an AI-powered assistant There are various tools within the AI Companion, so I recommend reading through the materials in the AI Companion Onboarding Center. Beyond getting a helpful (virtual) hand to note what's happening during a meeting, I was eager to use the AI-powered platform to spark creativity. Sometimes I go back into meeting summaries to be reminded of what was discussed. Teammates inevitably drop words of wisdom or note something significant to implement within a strategy or creative output. Thankfully, AI Companion will track those moments too. AI Companion's chapter mode also helped me understand the connection between team dialogue and topic matters. The high-level chapter synopsis provides a "storyline" for each meeting I enter -- and sometimes a throughline -- between what's continually discussed and resolved (or ignored). If you're a pattern seeker or are curious to understand connections, the AI Companion will be a useful and interesting resource to help with the day-to-day. If nothing else, it makes things easier for all its users, regardless of your schedule or location. Isn't it interesting that by doing less, in turn, you connect to more? A(I) good companion, indeed.
