The Staggering QSBS Numbers Behind Hot Q1 M&A Activity
Google’s $32B acquisition of Wiz is certainly getting people’s attention as Q1 2025 comes to a close, but the M&A market has been hot all quarter.
The Crunchbase chart below shows the 11 unicorn exits we saw this quarter plotted against the last 20 quarters. Q1 2025 brought the most $1B+ exits since Q1 2022, when we saw 19 monster outcomes.
Of course, the chart also tells the story of the Covid to late 2021 market insanity we saw as ZIRP took over the startup and growth ecosystem and wild buying activity added froth to the market - making these days feel like a summer in the Sahara.
Back when everyone was making billions, maybe QSBS wasn’t so top of mind, but now that founders and investors are clinging to a measly 8-11 behemoth exits per quarter (satire), maybe it’s finally time to get serious about keeping a few more of these millions in our pockets…every little bit helps.
Below we’ll lay out some of the QSBS potential from just three of these exits, based on a few rough assumptions, but nonetheless indicative of the kind of money that founders and investors leave on the table every time a deal happens. In these examples we assume about 30% of the company is owned by early investors (founders, employees, and Series A/B/sooner entrants) who all had QSBS at issuance, and that QSBS would save these investors on average 30% of their gains, if fully utilized.
Most of the tax savings here could be best facilitated by QSBS rollovers, but other strategies such as trust stacking could be useful as well.
Wiz, Acquired by Alphabet (Google) - $32B
This absolutely monumental exit saw Wiz’s founders each exit with more than $2.75B, and a stunning QSBS-eligible pot of likely more than $3B in potential tax savings across the cap table if shareholders took full advantage.
Ampere Computing, Acquired by Softbank - $6.5B
$6.5B in cash from Softbank is nothing to sneeze at…and neither is the more than $500M that Ampere shareholders could have kept out of Government hands if they took advantage of QSBS. These cut and dry cash deals are some of the best for early-planning shareholders but can be tricky for folks who didn’t sort things out ahead of time. Luckily the QSBS rollover window is 60 days.
Moveworks, Acquired by ServiceNow - $2.85B
ServiceNow’s largest acquisition to date boosts it’s access to AI tech for it’s platform and Movework’s founders had held stock since around 2016 - so QSBS! Everyone wins!
Until you realize that the QSBS exclusion cap runs out at $10M and eligible shareholders are likely dealing with a $250M+ tax bill if they didn’t put shares in trusts or conduct a few post-exit rollovers.
It’s hard to play a violin for those who are winning at the unicorn level, but our goal is to help founders and early shareholders become QSBS UNICORNS.
There should be many more opportunities this year as the market looks to stay hot.
