Why the startup community is starting to panic about tax reform

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Businesses across the U.S. are licking their chops over a possible corporate tax cut, but venture capitalists are sounding the alarm over a small change that could have big consequences for employees at startups.

The Senate tax reform bill as currently written would start taxing stock options as they vest. That means employees at startups who receive options as part of their compensation—a common practice in the tech industry—would have to pay tax as soon as the options are earned, rather than when they’re cashed in.

Fred Wilson of Union Square Ventures laid out in a blog post just why that’s a bad idea. Read more…

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