#startup
Startup
Essential accounting and finance guidance for startup founders
Section 1045 QSBS Rollover: How Founders Defer Capital Gains by Reinvesting Within 60 Days
Section 1045 lets non-corporate taxpayers defer capital gains from a QSBS sale by reinvesting proceeds into new qualifying small business stock within 60 days. After the 2025 OBBBA expansion (75M gross assets cap, tiered 50/75/100 percent exclusion at 3/4/5 years), the rollover can convert a missed Section 1202 exclusion into a deferred, and potentially excluded, gain.
SOC 2 Type II for SaaS Startups: Cost, Criteria, and the Six-Month Observation Window
A first SOC 2 Type II audit takes a minimum three-month observation window — six months for most enterprise buyers — and runs $45,000 to $150,000 all-in for a sub-fifty-person SaaS startup. Here is what the Trust Services Criteria cover, how to scope the engagement, and the six preparation mistakes that derail first examinations.
ASC 606 for SaaS Startups: The Five-Step Model, Deferred Revenue, and the Mistakes That Sink Audits
ASC 606 requires SaaS companies to recognize revenue as the service is delivered, not when cash is collected. This guide walks through the five-step model, the deferred revenue schedule auditors scrutinize, and the six recurring mistakes that trigger restatements during fundraising diligence.
Directors and Officers (D&O) Insurance for Startups in 2026: Coverage Limits, Premium Benchmarks, and When Investors Require It
D&O insurance for startups in 2026 typically runs $3,500–$10,000 per year for $1M–$3M of coverage; Series A term sheets routinely require $3M–$5M within 60–90 days of close. The most common claims at sub-100-person companies come from employment disputes, not securities allegations.
The 2026 SaaS Metrics Stack: LTV, CAC, NRR, and the Rule of 40
A founder's guide to the SaaS metrics that win term sheets in 2026 — how to calculate MRR, ARR, CAC, LTV, NRR, churn, burn multiple, magic number, and the Rule of 40, with current benchmarks and the calculation traps that quietly destroy investor confidence.
Section 174A R&D Expensing Restored: A Small-Business Guide to Amending 2022-2024 Returns
The One Big Beautiful Bill Act's Section 174A restores immediate domestic R&D expensing starting in 2025, and small businesses under roughly $31 million in average gross receipts have until July 6, 2026 to amend 2022, 2023, and 2024 returns to recover taxes paid under the TCJA capitalization rules.
409A Valuations: A Founder's Guide to Stock Option Strike Prices and Safe Harbors
A 409A valuation is the IRS-recognized appraisal that sets the strike price on every option grant. Without one, founders risk 20% federal excise penalties, premium interest, and California's 5% piggyback tax — all falling on the employee.
Profits Interests Under Rev Proc 93-27: A Guide to Tax-Free LLC Equity Grants
Profits interests let LLCs grant equity to service providers tax-free under IRS Revenue Procedure 93-27. This guide covers the safe harbor's three conditions, the threshold value rule, Rev Proc 2001-43 vesting fix, and the self-employment tax tradeoff partners should expect.
ROBS Rollover for Business Startups: How to Use Retirement Funds to Finance a Small Business Without Tax or Penalty
A working guide to Rollover as Business Startup (ROBS) arrangements — the five required steps, why only a C corporation qualifies, the Form 5500 and prohibited-transaction rules, IRS-documented failure rates, and when alternatives like SBA loans or 401(k) participant loans make more sense.
ASC 718 Stock-Based Compensation Accounting for Startups: A Practical Guide
ASC 718 requires startups to recognize the grant-date fair value of equity awards as compensation expense over the vesting period, even when no cash changes hands. This guide covers measurement, recognition, forfeitures, modifications, disclosures, and the audit pitfalls that derail funding rounds.
SAFE vs Convertible Note: A Founder's Guide to Choosing the Right Early-Stage Financing
A SAFE is a contract granting future equity with no maturity or interest, while a convertible note is a loan with 4–8% interest and an 18–24 month maturity that becomes due if no priced round closes — and Y Combinator's 2018 post-money SAFE locks each investor's ownership at Investment ÷ Cap, dilution that hits founders, not prior SAFE holders.
Software Capitalization Under ASC 350-40: A Practical Guide to the Capitalize-vs-Expense Decision
ASC 350-40 governs which software development costs SaaS companies expense and which they capitalize as intangible assets. ASU 2025-06 retires the three-stage model in favor of a probable-to-complete threshold, with the FASB signaling more costs will be expensed. This guide covers what qualifies, the EBITDA and balance-sheet impact, and how to set up an audit-defensible process.