For venture-backed startups with accumulated losses and R&D credits, before a sale, a new round or the first profitable year: upload your cap table history and get the ownership change analysis, the annual limitation and a memo for your auditor or buyer.
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Series B software company with losses accumulated over six years. Cap table history from incorporation: seed, Series A, Series B, two SAFEs and option exercises. The study finds one ownership change at the Series B closing, values the company at that date and shows the annual limitation and the losses available in each future year.
Choose your packageA venture-backed startup usually builds up net operating losses and R&D credits over several years. Those losses are valuable: they can reduce taxes once the company becomes profitable. Section 382 of the Internal Revenue Code limits how much of them can be used after an ownership change, and the question comes up at the worst moments — a sale of the company, a new round, an audit of the tax provision.
Small public companies disclose what they pay their auditors for this work. Proxy statements of smaller reporting companies list Section 382 studies among the tax services their audit firms bill for. For a startup, the same study often means a long engagement with an accounting firm and a stack of cap table spreadsheets.
382 Ready starts from the cap table history. You upload the data from your cap table software or spreadsheets: each round, each convertible note and SAFE, option grants and exercises, warrants, buybacks and transfers between shareholders. The service rebuilds the ownership on every date that matters.
From that history it identifies the 5-percent shareholders and the groups of smaller shareholders, and calculates the shift in ownership on each testing date over rolling three-year periods. Where the shift exceeds 50 percentage points, it marks an ownership change and the date on which it happened.
For each ownership change, the study uses the value of the company at that date and the applicable long-term tax-exempt rate to calculate the annual limitation on losses and credits. Built-in gains and losses are taken into account where the data allows. The result is a table showing how much of the accumulated losses can be used in each year.
You receive a written memo that explains the method, the ownership changes found and the limitation, together with the tables behind it. The memo is meant for your auditor, your tax advisor or a buyer's diligence team, who will review it and draw their own conclusions.
The study is not a one-time exercise. Each new round, secondary sale or option exercise wave can change the picture. When your cap table changes, you add the new events, and the study is updated from where it stopped instead of starting over.
382 Ready is meant for venture-backed C-corporations and small public issuers whose auditors ask for the limitation. The study is priced per company and per update, not per hour.
382 Ready does not provide tax or legal advice and is not an accounting firm. The study supports the work of your tax advisor and auditor, who remain responsible for the tax positions taken.
Venture-backed C-corporations with accumulated losses or R&D credits, and small public issuers.
The full cap table history: rounds, notes and SAFEs, options, warrants, buybacks and transfers.
Ownership change dates, the annual limitation, a table of available losses by year and a memo.
No. The study supports your tax advisor and auditor, who review it.
Not yet. The service is in preparation, and we are checking whether companies need it.