May 7, 2026
Adapted from a Thelander lunch-and-learn with Jodie Thelander (J. Thelander Consulting) and Alessandro, founder & CEO of GetDynasty (and the first sales hire at Carta).
For founders and early employees at private companies, QSBS (Qualified Small Business Stock) can turn a life-changing exit into a largely tax-free one — but only if the equity is structured and exercised correctly, and early enough. This session paired private-company compensation data with QSBS strategy to show how to get both halves right.
Benchmark by Money Raised and Headcount — Not Just Round
Total financing raised is one of the most reliable lenses for reading compensation, and it beats series labels for precision — a Series A that raised $50M is a very different company from a Series A that raised $5M. Headcount matters too: a first sales hire should get meaningfully more equity than the next one. The more granular the peer comparison (money raised, employees, sometimes revenue), the better. And this all ties directly to QSBS, because the early employees are the ones best positioned to benefit.
AI Valuations Are Distorting Equity Grants
Capital is concentrating in AI companies, some getting extraordinary multiples with zero revenue — seed and Series A companies carrying multi-hundred-million valuations. Because valuations are so high, these companies hand out far less equity on paper, even though each slice is worth more. Whether those valuations hold is an open question. Meanwhile, private-company multiples have shot up and haven’t been repriced in years, while public-market multiples have compressed to the floor — so consolidation may be coming, but no one knows for sure.
The Compensation Numbers Are Stable
Despite the noise, the data is remarkably stable. Non-founder CEO equity clusters around 4–6% across median, 75th percentile, and max (it peaked near 6% in 2022 and sits around 5.5–5.6% now), with total cash rising as financing grows. That stability is exactly why getting the cash/equity mix right at the start matters — and why founders and early employees who take equity in lieu of cash should understand the QSBS upside they’re sitting on.
QSBS 101: Exercise Early, Hold Long Enough
To qualify for QSBS, you must actually acquire the shares — founders receive them, but option-holders must exercise. The rules split at July 4, 2025 (the “big beautiful bill” date). Old rules: $10M exclusion, shares acquired before the company hit $50M in assets, with a 5-year holding period for the full exclusion. New rules: $15M exclusion, the asset limit rises to $75M, and holding is now tiered — 3 years for 50% of the exclusion, 4 years for 75%, or 5 years for the full amount. The exclusion is 100% federally tax-free (and state-free in most states). As one tax advisor put it: where else can you make $10M and pay zero tax?
Educate Your Employees — and Track the Threshold
A recurring theme: founders and companies must educate employees about QSBS, because many don’t know that holding options isn’t enough — you have to exercise to start the QSBS clock, ideally before the company crosses the asset threshold. This is especially urgent for companies (like biotech) whose valuation can explode overnight. The responsibility to track the eligibility cutoff falls on the company: your CFO or finance lead should already know the date after which QSBS is no longer available, so ask before exercising. Equity from a previous startup can also qualify, provided it was held early enough and meets the holding period before exit.
Stacking QSBS With Trusts
Because QSBS is granted per shareholder, founders with the potential to make more than $10–$15M can multiply the benefit by gifting shares into trusts for a spouse, children, or siblings — each trust gets its own fresh exemption. Four trusts could mean roughly $60M of additional tax-free capital-gains potential. A founder can retain voting rights by serving as the trust’s investment manager, though distributions must be controlled by a third party. The rule of thumb: if you hold over ~1% of a company with billion-dollar potential, it’s worth exploring — alongside a CPA and lawyer. Companies in gray areas (regulated industries, or non-traditional tech) may want a QSBS attestation letter, since eligibility isn’t always clear-cut.
The Bottom Line
Two things have to go right, in order: get the compensation numbers right at the start, then plan the wealth side before it’s too late. QSBS isn’t “now or never” — you can act up until the exit — but the earlier you move, the better, and if you miss the window, you can’t go back. The tax implications are enormous, which is why understanding not just what you own but how you own it is the whole game.
This article is adapted from a Thelander lunch-and-learn and is intended as general educational information, not legal, tax, or investment advice. QSBS and trust rules are complex and fact-specific — consult qualified tax and legal advisors before acting.