Now, that said, one word of caution, as the LLC becomes increasingly profitable, one should consider the recent changes in federal income tax rates and whether in the long run the founder is going to receive enough tax benefits to justify the accommodation. As the business grows, if there are losses, losses will turn into profits and profits will grow, or at least that is what the business plan says. As profits grow, those profits will be taxable at increased federal rates for the upper bracket of 39.6 percent plus the additional 3.8 percent for passive investors (plus applicable state taxes). With federal corporate rates at 35 percent (plus applicable state taxes), if the company is not planning on paying dividends, then long run tax efficiency may be best achieved in a C corporation. That said, given the ability to provide a basis step up in the assets of the LLC to the buyer in connection with a future sale of the company and if the company is likely to pay … [Read more...] about Venture Funds: Don’t Fear the LLC
The new venture fund
The Jobs Now Fund would be a rapid-response fund, which would issue $200 million in tax credits over time to certain insurance companies that made investments in certified capital funds. The actual tax credits would be for 80% of the value of the investments made. In other words, the $200 million in tax credits could potentially attract up to $250 million in investments. The credits would not be able to be claimed for a minimum of five years, thereby insuring that the money would be invested long before the credits would be paid. … [Read more...] about $400 Million in New Venture Capital Money
StartUp Health , a New York-based accelerator, and Rock Health , a San Francisco-based seed fund, each recently released its independent 2015 mid-year report on venture funding and transactional data of the digital health sector. The following are some key observations: … [Read more...] about Digital Health Venture Funding, M&A and IPO Activity in the First Half of 2015
Many corporate VC funds have a mixed objective; Are they seeking to maximize financial return or to develop insight and opportunities into new markets and technologies? Without a clear objective, it’s hard for a large corporation to evaluate success and even determine the type and level of support to provide to the companies in which it’s invested. … [Read more...] about Corporate Venture Funds: Friend or Foe?
Axelrad wouldn’t tell the legal publication whether the remaining members of his group—four associates and another of counsel—would also leap to the new firm. But he did say the associates “have certainly expressed interest.” … [Read more...] about Venture Fund Lawyers Leave Wilson Sonsini