Fundraising
QSBS
Also known as Qualified Small Business Stock
QSBS, or Qualified Small Business Stock, is US C-Corporation stock that may qualify under Internal Revenue Code Section 1202 for exclusion of a substantial portion of capital gain on sale. Qualification requires meeting conditions including a minimum holding period and company-level tests.
In plain terms: A tax break on selling shares in a qualifying US corporation, if you held them long enough.
Why it matters
Worth understanding at incorporation rather than at exit, because the holding period runs from acquisition and the company-level tests apply throughout. Founders who convert from an LLC should ask specifically how conversion affects the clock.
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