Most startup employees have no idea how to value their equity

This makes it hard to evaluate different job offers and even harder to negotiate your compensation

Here's my guide on how to think about the value of your equity:

(You may want to bookmark this for later) The most important rule: the quality of the business is the single most important thing

Most startups are worth $0, and only the very best companies are worth a lot of money.

It doesn't matter how big a percentage you own of a company that ends up being worth $0

One of my early investors at @teachable invested $10K in our seed round via his Roth IRA

When we sold the company, that was worth ~$200K paid to his Roth with 0 taxes

Here's a step-by-step guide on how to invest in any startup on @AngelList from your Roth IRA: 1 - Create a Self-Directed Roth IRA on @carryhq_

We support regular Roth IRA's (to invest in stocks + ETF's) along with self-directed Roth IRA's to invest in crypto, startups etc.

Make a deposit into the Roth IRA or transfer dollars from another account into it

We're almost at the deadline to set up and contribute to a Solo 401k to save money on your 2023 taxes

Here's a step-by-step guide on:

1 - Who is eligible for a Solo 401k
2 - How to set one up & contribute to save on 2023 taxes

Has to fully in place by April 15 so hurry up! If you have any self-employment income as a sole proprietor or a single-member LLC, you have until April 15 to set up & fund your Solo 401k

Even if you made money posting on Twitter that would count!

You can make pre-tax or Roth contributions as both an employee & employer

The best way to save money on taxes in America:

Start your own business

The US tax code is rigged in favor of small and large business owners, entrepreneurs and side hustlers

Here are my 15 favorite tax hacks for business owners: 1 - S-Corp

Consider setting up an S-Corp when you cross $100K+ in net income

This splits your income into a fair W-2 salary (on which you pay self-employment taxes) and profits on which you don't

Can save $5K+ a year even with additional complexity of payroll etc.

Peter Thiel grew his Roth IRA to $5B

Mitt Romney grew his Roth IRA to $100M

When they retire, they will get access to the entire amount without paying a dollar in taxes

Here's exactly how they did it and how you can emulate the same strategy: You put after-tax money in a Roth IRA but then pay no taxes as the money grows

When you retire, the entire amount is available to you with zero tax (no matter how high tax rates are)

In fact, a Roth IRA is so powerful the IRS limits high earners from using it!

Employees with high salaries pay the highest tax rate of anyone in America

But, there's still a lot you can do to lower your tax rate!

Here are 10 strategies for W-2 workers to pay less in taxes: 1 - Long-term capital gains

When you sell an investment, try & hold on to it for at least 1+ year - you pay a much lower tax-rate

Married couples actually pay 0 taxes on the first ~$90K+ of long term capital gains every single year

Worth trying to hit this every single year

An HSA has a bigger tax benefit than any other account in America

70 million Americans are covered by an HSA (Health Savings Account) -- but most of us are not using it optimally

Here's how to maximize the power of an HSA: An HSA is the only investment account that is triple tax-advantaged:

1 - Tax deduction when you contribute

2 - Tax-free investment growth

3 - Ability to spend tax-free HSA dollars on eligible healthcare expenses

And after age 65, you can withdraw the money for any reason!

I sold my first startup in 2020 for a life changing amount

Since then, I've talked to countless other founders who have gone down the same path

Here is a thread of my best advice for startup founders on how to navigate the process of selling your company: 1 - Companies are bought, not sold. The best way to maximize your sale price is to genuinely not be looking to sell.

The second best way is to create a bidding situation between multiple interested parties.

Equity given to the earliest startup employees feels very low relative to the amount of risk they take

(especially if they are accepting materially less cash compensation in the deal)

Here are a few things you can do as a founder to level the playing field & make them win too: 1 - Let your team own shares directly vs options

This is only possible in the early days before becoming cost prohibitive

But if you have your team buy their restricted shares early, their 5-year clock starts ticking sooner to be eligible for QSBS

Could save millions in taxes

How to think about raising venture capital for your startup

Most fundraising advice is written by investors for founders

Here's a thread of my best advice from founder to founder: 1 - Understand venture capital incentives and how they are different from yours

You make as much money selling a company for $200M where you own 50% as selling a company for $1B where you own 10%

But the first outcome doesn't move the dial for investors with a large fund!

QSBS is the most generous tax break in America today

It allows startup founders, employees & investors to pay no taxes on $10M *each*

But if a founder is not careful, they can accidentally blow up QSBS status for every single shareholder (!)

Here's what to watch out for: QSBS is less about what to do versus what not to do

Almost every tech startup qualifies for QSBS tax treatment by default:

- Active US-based C-Corporation
- <$50M in assets

But be very careful about accidentally doing something that destroys QSBS status for everyone, like:

Just completed my favorite annual tradition: maxing out my Roth IRA

I earn too much money to contribute to a Roth directly so I had to do a "backdoor IRA"

Sounds complicated, but it only took me a few minutes

Here's exactly how I did it: It's very worth it to build a massive Roth IRA

You don't pay a dollar of taxes on it in retirement, no matter how high taxes are in the future

Peter Thiel grew his Roth IRA to $5B!

This account is so good that you aren't allowed to directly contribute if you earn over $160K!

Startup investing can be brutal

You could invest in a company at a low valuation early on

The business hits a rough patch, but makes it through & raises money in a tough market

Company grows and sells for billions

You could *still* end up making almost no money & here's how: When the fundraising market is tough, all bets are off in terms of how early investors are protected

New investors have all the leverage and very often, they invest on terms that effectively dilute early investors to 0

Unless the early investor also invests aka "Pay to Play"

Unless there is legislative change, it no longer makes sense to start a bootstrapped software startup in America anymore

It’s hard to overstate how catastrophically bad Section 174 is for software companies

Here’s an overview for anyone hearing about this only recently: As a business, you pay taxes on your profits

Profit is revenue minus expenses

But if you buy real estate with your business (or another asset that has a long useful life) - you can’t deduct the entire purchase year 1

You need to “amortize” it aka slowly deduct it over years

How every solo business owner in America can get $1,500 from the government: When the government wants to incentivize a certain activity (like owning electric cars), they give us tax credits

Tax credits are super powerful because unlike tax deductions they offset taxes you would pay dollar for dollar

Here’s a great, new one for all business owners:

A 529 plan gives you a massive tax benefit in saving for a college education

16 million people have one in America - but most people are not using it to its fullest

Here are 7 less known hacks to best utilize the full power of a 529: A 529 plan does not provide a federal tax benefit when you invest dollars into it

But, the gains inside the account are tax-free

And you can use them to pay for qualified educational expenses for the designated plan beneficiary (typically, your children)

Powerful

Are you a US citizen considering living and working abroad?

Or fantasize about saying F-it and becoming a digital nomad for a few years? (highly recommend, btw)

Here is an overview of how taxes work as an expat or digital nomad from America: First, the bad news:

The United States is one of the only countries in the whole world that taxes its citizens on global income

No matter where you live, you likely have to file & pay US federal taxes

But, there's a lot of strategies that can minimize the impact!

My favorite perk of being a business owner or having a side hustle:

You get access to the most powerful retirement plan in America - a Solo 401k

Here are 10 reasons why everyone eligible should set one up before December 31: (& why pick this over a SEP IRA) 1 - Super high contribution limits

You can contribute $66,000 this year and $69,000 next year

If you are over 50, that jumps to $73,500 this year

You can take the entire contribution amount as a giant tax deduction if you'd like!

Much easier to max this out vs a SEP

A Roth IRA is so powerful at reducing your lifetime tax rate that the IRS limits who can use it

If you make more than $153K, you cannot directly contribute to a Roth

Here is how to easily work around this limit: (step-by-step with screenshots) Most people have heard of a "backdoor IRA"

Yet, almost no one does it because of the perceived difficulty

If you follow the step-by-step instructions here, you can contribute to a Roth no matter how much you make

(Screenshots are from @carryhq_ but you can use any provider)

QSBS is an absurdly generous tax break for founders to pay zero taxes when they sell their company on up to $10M

With smart tax planning they can multiply $10M to $20, $30 or $40M

But crazily enough, there’s a loophole for founders to pay no taxes on almost $500M!

Here’s how: QSBS allows shareholders in C-Corporations to pay zero federal (& in most cases, also state) taxes on the greater of:

1 - $10M

2 - 10 times the cost basis of the shares

As long as the shares are bought when company has under $50M in assets

This loophole is predicated on #2

Most startup founders who sell their company today will pay zero taxes on the first $10M they make

For some, it could be no taxes on up to $20M, $30M or $40M. Literally zero tax.

Here's how the most generous tax break in America works (& how you can take maximum benefit): The four magic letters are QSBS: Qualified Small Business Stock

The government wants us to start businesses

So they decide to give biz owners a 50% tax break when they sell

The 50% eventually becomes 100% on up to $10 million or 10 times the cost basis (whichever is more)