The AI Gold Rush Is Reshaping Founders' QSBS Strategy
The pace of change in the AI startup ecosystem is staggering. What used to take a decade is now unfolding in just a few short years. Early-stage companies are raising massive funding rounds, founders are accessing liquidity earlier than expected, and the traditional path from fundraising to exit is being compressed across the board.
In the first half of 2025 alone, AI startups based in the United States secured more than $104 billion in venture capital. That figure nearly matches the total for all of 2024 and accounts for almost two-thirds of the country’s venture funding year-to-date. While the largest rounds are still concentrated in infrastructure and foundational model companies, the majority of activity is happening in applied AI. Startups embedding AI into industries like insurance, healthcare, logistics, and finance are attracting significant interest from investors looking for real-world impact and adoption.
Despite the record inflow of capital, exit activity has lagged. Most outcomes have taken the form of acquisitions, typically smaller deals where large companies are absorbing AI startups to enhance their own offerings. There have been a handful of public offerings, but they remain rare exceptions. For many founders and their investors, that means a lot of capital is going in while far less is coming out in the form of realized gains.
This shift in exit dynamics is changing how founders approach liquidity. With larger rounds happening earlier and more opportunities to sell a portion of equity through secondaries or structured deals, many are gaining access to meaningful liquidity before a full company sale. These early monetization events offer freedom and flexibility but also create tax consequences that require careful planning.
One of the most powerful tools available to founders in this situation is the Qualified Small Business Stock (QSBS) exclusion. Under Section 1202 of the Internal Revenue Code, gains on qualified C-Corp stock can be excluded from federal taxes, often up to $10 million or more. But timing and structure are everything. In the current environment, founders are hitting liquidity events just one or two years into their journey, long before the five-year holding period typically required for QSBS eligibility.
This is where strategic QSBS planning matters. Some founders are using Section 1045 (QSBS Rollovers), which allows them to roll over the proceeds from an early sale into another qualified company and preserve the potential for future QSBS treatment. This strategy can defer taxes and expand the total amount of tax-free gain across multiple ventures. However, executing a rollover correctly requires a suitable rollover option, legal precision, and clear documentation; and the window to act is limited.
This is why QSBSrollover.com exists: to help founders maximize QSBS in an end-to-end “Rollover as a Service” package. If you’re selling stock short of the QSBS holding period, or making more than $10M in pre-tax gains, set some time to discuss with our team.
As the broader economy continues to seek stability, and interest in AI continues to grow, the IPO pipeline may begin to reopen. Until then, the dominant theme will continue to be early and partial liquidity. Founders who are prepared to navigate that reality from both a financial and tax perspective will be in the strongest position to benefit.
