Product
Mika Arai
A new early-stage venture fund built to target Qualified Small Business Stock (QSBS) benefits from day one — verified and monitored, not assumed.
Today we're announcing the Goodfin QSBS Venture Fund, a tax-advantaged early-stage venture fund designed to give accredited investors access to top venture and Y Combinator–backed startups while optimizing for Qualified Small Business Stock (QSBS) benefits under IRC Section 1202.
The idea behind the fund is simple: the best tax advantage in venture shouldn't be the one investors and founders discover too late. QSBS allows eligible holders to exclude up to 100% of federal capital gains on qualifying startup equity — potentially millions of dollars per investment. Yet it remains one of the most underused benefits in the market, largely because it's one of the hardest to get right.
We built this fund to remove that friction. Every company is evaluated and verified for Section 1202 eligibility before investors come in, and monitored throughout the hold — so the tax treatment at exit is targeted from the start rather than reconstructed after the fact.
Why QSBS matters more now than ever
QSBS (Section 1202) has quietly been one of the most powerful tax incentives available to startup founders, early employees, and investors since 1993. In July 2025, it got a major upgrade.
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, meaningfully expanded QSBS for stock acquired after that date. Three changes stand out:
A new tiered exclusion schedule. Instead of an all-or-nothing five-year cliff, investors can now exclude 50% of gains after a 3-year hold, 75% after 4 years, and 100% after 5 years. Partial exclusions and earlier exit flexibility are now on the table for the first time.
A higher exclusion cap. The per-issuer cap rose from $10M to the greater of $15M or 10X your cost basis, indexed for inflation after 2026.
A broader universe of eligible companies. The issuer's gross-asset ceiling increased from $50M to $75M, bringing more growth-stage startups into QSBS eligibility.
Importantly, these enhanced rules apply only to QSBS issued or acquired after July 4, 2025. Stock issued on or before that date remains subject to the prior rules — including the mandatory five-year hold and the $10M cap. That pre- versus post-enactment distinction is central to planning correctly, and it's a distinction we track carefully across the fund.
The takeaway for investors and founders alike: QSBS is now more flexible, more generous, and available to more companies than at any point in its history. The opportunity is real — but so is the complexity.
The problem: QSBS is easy to lose and hard to prove
QSBS eligibility isn't a checkbox. It depends on a chain of corporate- and shareholder-level requirements that have to be satisfied at issuance and maintained over the entire holding period:
The company must be a domestic C-corporation with gross assets under the applicable ceiling at issuance.
At least 80% of assets must be used in an active qualified trade or business (certain fields — such as professional services, financial services, hospitality, and others — are excluded).
Stock must generally be acquired at original issuance, not purchased from an existing shareholder.
Holding-period and per-issuer cap rules must be tracked precisely, especially where an investor holds both pre- and post-OBBBA stock in the same company.
Many startups unknowingly compromise their QSBS status through minor structuring decisions. Many founders and investors assume they qualify and only find out at exit — when it's far too late or expensive to fix. In a world where a single eligibility failure can cost millions in excluded gains, "we think it qualifies" isn't good enough.
This is the gap the Goodfin QSBS Venture Fund is built to close.
Verified, not assumed: how the fund works
Every company in the fund is analyzed and vetted for Section 1202 eligibility by our partner CapGains Inc., a tax optimization platform, before we invest — and monitored throughout the fund's holding period. CapGains, through its affiliated law firm QSBS Expert Law, provides further legal analysis and support as needed. Eligibility is documented at the time of investment, covering the applicable corporate- and security-level QSBS requirements.
That's the core of our approach, and our central difference from generic funds and one-off SPVs: eligibility is certified and continuously monitored, not presumed.
Highlights of the fund:
Access to top VC- and YC-backed startups. A curated portfolio of promising early-stage companies, typically Seed through Series C, backed by tier-one venture investors and Y Combinator. Companies are selected for both investment merit and QSBS qualification — so investors aren't trading returns for tax efficiency.
Certified and monitored eligibility. Every company is evaluated and verified for Section 1202 eligibility before investment and tracked throughout the hold.
Exclusion of up to $15M+ per investment (or 10X cost basis). Structured to help eligible investors capture the full benefit the statute allows.
Built for Section 1045 rollovers. Investors sitting on existing QSBS-eligible gains can roll proceeds into the fund within the 60-day window to extend their holding period and keep capital working in the next generation of startups.
The case for investors
For accredited investors, the fund offers a way to pursue high-growth private market returns and a targeted tax outcome in a single, professionally managed vehicle — without having to impose on company management, hire accountants and lawyers, and try to run Section 1202 diligence themselves on every deal.
The math is compelling. Under the new tiered structure, an eligible investor could exclude the greater of $15M or 10X basis in gains per qualifying company from federal tax. For investors with existing QSBS positions, the Section 1045 rollover provides a path to defer and preserve benefits while redeploying into fresh opportunities. And because the OBBBA removed the AMT preference on excluded QSBS gains, investors relying on the revised rules shouldn't face AMT leakage on the exclusion.
Just as important is what investors don't have to do: chase down and monitor company information, verify C-corp status, confirm gross-asset thresholds, or hope a company hasn't quietly tripped an eligibility rule. Goodfin and its partners do that work up front and keep doing it for the life of the investment.
The case for founders
QSBS isn't only an investor perk — for founders, it's a competitive edge in fundraising and talent.
Attract sophisticated capital. Investors increasingly seek out QSBS-eligible companies. Certification signals diligence and can make a company materially more attractive to the kind of capital founders want on their cap table.
Reward your earliest believers. QSBS can save your early backers and employees significant tax at exit — an additional, tangible reason to bet on you early.
Protect eligibility from the start. Because so many startups lose QSBS status through avoidable structuring mistakes, getting it right early matters. If we invest in a company through the fund, we cover the full cost of the initial QSBS analysis and help monitor the company's status throughout the life of our investment.
Founders raising now can submit their company for consideration to the fund; we invest in qualifying companies, typically at the Seed through Series C stages, and treat all company information as confidential.
Why Goodfin is built for this
Goodfin is the world's first agentic private wealth platform. Founded in 2022 and backed by Y Combinator, we use purpose-built AI to unlock access to private market investing for a new generation of investors — combining hyper-personalized portfolio construction, intelligent market analysis, and institutional-grade guidance.
The QSBS Venture Fund sits naturally on top of that foundation. Sourcing high-quality, QSBS-eligible startups at scale requires both deep access to top venture and YC-backed companies and the analytical rigor to verify eligibility at the corporate and security level across an entire portfolio. Goodfin brings the access and the platform; CapGains brings the tax certification and monitoring. Together, that's a combination generic funds and ad-hoc SPVs simply don't offer.
The fund is also squarely aligned with the legislative intent behind QSBS: keeping capital flowing into the U.S. startup ecosystem. For rollover-eligible investors, that means proceeds from one generation of startups going straight back to work in the next.
Don't leave millions on the table
Whether you're investing in the next great startup or building one, QSBS can transform your financial outcome — and the post-OBBBA rules make the opportunity larger than it has ever been. The Goodfin QSBS Venture Fund is designed to help you capture the full benefit you can earn, with eligibility verified and monitored from day one.
Founders raising now: submit your company for consideration →
Important information and disclosures
The Goodfin QSBS Venture Fund is available to verified accredited investors only.
*Up to 0% federal capital gains tax and "up to 100% exclusion" refer to the maximum federal exclusion potentially available under IRC Section 1202 for QSBS held at least five years and acquired after July 4, 2025. Lower exclusion percentages (50% at 3 years, 75% at 4 years) apply for shorter holding periods. The enhanced OBBBA rules — including the tiered exclusion schedule, the $15M per-issuer cap, and the $75M gross-asset ceiling — apply only to QSBS acquired after July 4, 2025; QSBS acquired on or before that date remains subject to the prior five-year hold and $10M cap. Exclusion is subject to per-issuer caps (the greater of $15M or 10× adjusted basis for post-enactment stock) and to satisfaction of all Section 1202 corporate- and shareholder-level requirements.
**State tax treatment of QSBS varies. Several states — including California, Alabama, Mississippi, New Jersey, and Pennsylvania — do not conform to the federal QSBS exclusion, and others conform only partially. Even fully excluded federal gain may be taxable at the state level depending on residency.
Although the fund is designed to target and maximize QSBS eligibility, outcomes are not guaranteed and may be affected by portfolio company or shareholder actions beyond Goodfin's control. QSBS analysis and legal support are provided by CapGains Inc. and its affiliated law firm, QSBS Expert Law. Learn more at capgains.com.
Goodfin, together with its affiliates ("Goodfin"), is a technology company and is not a broker-dealer or registered investment advisor. Goodfin does not make investment recommendations, and nothing in this post should be construed as a recommendation for any security or investment. Investing in alternative assets carries a high degree of risk, may not be suitable for all investors, and may involve illiquidity, complexity, significant volatility, and loss of principal. Past performance is not indicative of future results. This post is for informational purposes only and is not tax, legal, or investment advice. Please refer to the full investor materials and disclosures for details on risks, charges, and expenses.
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