Tony Shipley talks important tax codes for investors

In this episode we discuss some important tax codes that most investors and entrepreneurs don’t know about and could save millions! 

Marcia Dawood interviews former Chair of the Angel Capital Association, Tony Shipley. Marcia and Tony worked together as ACA board members for over 7 years! Tony is also Chairman and Co-founder of Queen City Angels, Cincinnati’s first group of experienced, accredited investors committed to accelerating the growth of early-stage businesses. Their primary investment areas are Information Technology and Life Science.

Tony tells our listeners all about how he got started in the angel investing world and what led him to co-founding QCA with the hopes to provide growth to his community. Since the organization was founded in 2000 they’ve grown from 5 to 180 members, invested in more than 110 different companies, and invested approximately one hundred million dollars. He also shares how diversification was a very important factor in moving from network to fund model and growing the organization to what it is today. 

Marcia also asks Tony about the 2 most memorable exits he has been part of (one of which was 9 figures!) and how his group was able to use Section 1202 of the Internal Revenue Code (aka IRC) to take advantage of the Qualified Small Business Stock (aka QSBS) provision that eliminated federal tax on the exit transaction.  They also discuss code 1045 and why these codes encourage investors to recycle QSBS returns from one deal to another QSBS company to obtain further tax savings. A new-er term is also revealed to our listeners, “dry powder,” which is the money investors set aside to make follow-on investments once a company starts to grow.  The initial investment is important but sometimes those follow on rounds make the difference as to which companies make it and which ones don’t.

Lastly, Tony and Marcia discuss the importance the ACA has on public policy, how active they are with lobbying for tax codes and the work being done to preserve the definition of “accredited investor.” 

This episode is packed with great tips and inspiring stories for both entrepreneurs and current/future investors! Listen to the full episode with Marcia and Tony here!