Why We Invested In CapGains

Reach out to Brett Calhoun, Managing Director & GP at Redbud VC, at brett@redbud.vc to learn about Redbud, and subscribe to our newsletter here.

💡 CapGains (+QSBS Expert) is a finance software platform that enables investors to save money & time by simplifying complex tax provisions. The Company’s first product streamlines reporting for the Qualified Small Business Stock (“QSBS”) tax incentive used by millions of investors, founders, and employees.

QSBS: QSBS is 100% exempt from capital gains tax upon sale on the first $10M or 10x the investment made after September 27, 2010.

Investment Premise

The founders of CapGains have uniquely targeted the $16.5B tax management software market by becoming the leaders for tax incentives that benefit shareholders but require corporate input. The company first tackled QSBS, which has historically been handled by a few specialized but pricey attorneys. Within a few months, the company had reached over 8k monthly site visitors who were employees, founders, LPs, VCs, and angel investors. Stakeholders looking for QSBS analyses began asking their companies to conduct more in-depth QSBS diligence, proving early market needs and the potential for product-led growth.

The long-term vision of the founding team is to improve the transparency of these tax incentives, thus expanding their usage to ensure that the tax incentives work to their fullest potential. The founding team has a deep understanding of tax incentive pains from experience in public accounting (e.g. Deloitte, PwC, etc.), and a passion for helping early-stage companies and their stakeholders realize the benefits of such incentives. In addition, the founders’ work ethic and analytical skills put them in a position to conquer the market. Complex tax situations are a daunting multi-billion dollar problem to tackle, but the CapGains team brings the expertise and mentality to solve it.

Reach out to Brett Calhoun, Managing Director & GP at Redbud VC, at brett@redbud.vc to learn about Redbud, and subscribe to our newsletter here.