There was a really good podcast episode with Patrick and John Collison on Invest Like the Best. It’s denser than most podcasts, covering (among others) differing perspectives on founder-as-auteur versus founder-as-metonym-for-tribe, how payments has gotten more complex, etc.
@patio11
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Crypto Fraud: Internal Memos Reveal Customer Fund Manipulation Schemes
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Complicated by written internal memos explaining that the object of the puffery was convincing customers to not withdrawal their money and instead to deposit more to fill the holes. Also complicated by the professional culture of crypto not being an enshrined one. And by retail.
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Crypto Insolvency: Insider Knowledge of Market Deception Revealed
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One of the reasons I was Mr. Chicken Little last year about the crypto market was because I was reliably informed they internally understood themselves to be insolvent while putting out calm-the-waters statements.
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Tech Company Fraud: False Statements About Internal Problems
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DCG is criticized for, among other things, making false public statements that everything was fine when internally understanding that things were very not fine. Fraud is a really simple crime.
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IRS Capital Loss Limits on Startup Investments
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You: “There is no guarantee that this company ever exits!”
IRS: “Then you can claim $3k a year of capital losses back. After you pay.”
You: “Even if we successfully exit it might take another 10 years!”
IRS: “The United States will be here and diligently pursue what it is owed.” -
Startup Founders Face Tax Obligations on Vested Equity
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And so if you are a founder of a high flying startup and own 20% in year 4 when it is worth $200 million, congratulations! IRS: “Alright you vested $8 million of equity this year.”
You: “Paper wealth only.”
IRS: “Yeah most is. You owe approximately $3.5 million.” -
Founder Equity Vesting Tax Implications and 83(b) Filing
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You’d think if the founders stick around this is consequence free. Oh no no no. Because that equity vesting over time *is income when it vests* and according to the law, unless you file an 83(b), it is valued at the fair market value *as of the time it vests.*
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Founder Equity Vesting: Why Professional Investors Require Time-Based Ownership
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At the exact moment a company is spoken into being, it’s equity is worth almost nothing. For various reasons, professional investors will not allow the founders to own it outright at a cost basis of nothing. They will want that ownership to vest over time.
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83(b) Election Tax Trap for Startup Founders Explained
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“Can you walk through, for a non-specialist, how failure to have an 83(b) election bankrupts founders?” You have to pay taxes on all income earned in a year, right? Equity compensation is a form of income, right? That sets the stage for the time bomb.
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Stripe Atlas Legal Updates Impact Startup Documentation Standards
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(Here that is Stripe Atlas but presumably YC’s lawyers, early stage VC firms, etc will all update their standard packets to take advantage of this.)