What does Paul Mockapetris say about qualified small business stock and startup taxes?

Paul Mockapetris says many startup employees pay more tax than necessary because they do not know about Section 1202 qualified small business stock or 83(b) elections, which let you exercise early at a low price. In one acquisition he paid long-term rates on his Series A shares and zero federal tax on early-exercised common, while unexercised options were taxed at around 65%. The buyer barred the company from giving employees tax advice, so he passed on citizenship and capitalisation records and told them to read 1202.

• Mockapetris guesses about half of people overpay because they cannot get the information.
• Qualification depends on company size, business type and the share of US citizens, according to Mockapetris.

▸In their words

“Silicon Valley pretty much screws the peons and rewards the VCs.” Paul Mockapetris · at 48:03 — open in the transcript →

Source: our own transcription of the episode. The full conversation is on Ryan Peterman (2026-10-19). Read the whole episode summary →

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