Investor Connect Podcast

Gains and Losses

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

There’s an old saying, it’s not how much you make, it’s how much you keep that counts. 

Tax management is an important topic for angel investors. 

There are specific laws that give tax breaks to investors for startup investments.

The first is called Section 1244 which gives the investor the ability to take ordinary income deductions on losses rather than capital gains deductions.  

Since many startup investments result in a loss, Section 1244 helps offset those losses.

For successful exits, Section 1202 reduces or eliminates taxes on gains from an exit. 

For stock acquired after 9/28/2010, there is a 100% exclusion on the gains for tax purposes. 

Before that date, there is a 50%-75% exclusion depending on the date. 

You must hold the stock for 5 years.

Then there is the 1045 rollover which lets the investor rollover proceeds from the sale of stock from one startup to a new one without paying capital gains on the first one.  

You must do so within 60 days.

If you have restricted stock, then 83(b) election lets you pay the taxes when the options vest, rather than when you exercise them. 

This lets you pay taxes when the value is lower and exercise the options later when the value is higher.

These rules have been in place for a while now, so it’s important to check with your accountant about any changes.


Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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For more episodes from Investor Connect, please visit the site at: http://investorconnect.org 

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Direct download: Startup_Funding_Espresso_--_Gains_and_Losses.mp3
Category:general -- posted at: 6:00am CDT

In this our 700th episode of Investor Connect, Hall welcomes David Narrow, CEO at Sonavex.

Sonavex is a venture-backed clinical stage Medtech company spun out from Johns Hopkins with two FDA clearances. The company’s technology uses deep learning to improve arteriovenous fistula (AVF) maturation times for patients with end-stage renal disease. Despite the fact that the superior method of AV access for the 4.9M patients projected to be on dialysis by 2025 is an AVF, they fail to mature in >30% of procedures and are rendered unsuitable for dialysis. Those that do mature take a median time of 6-9 months until they are used. This results in significant catheter-based dialysis and associated bloodstream infections, costly hospitalizations, and increased mortality. Every additional catheter day costs more than $160 per patient per day to CMS, or $30,000+ per patient. 

Volumetric flow rate, diameter, and depth have been proven to determine AVF maturation status. However, the specialized skill set required to operate conventional ultrasound prevents its use in the dialysis clinic, and the additional travel needed to see a trained sonographer limits its use in this patient population. Due to a variety of factors including socioeconomic status, compliance with non-dialysis appointments is 12-33%. Sonavex’s technology enables staff at the dialysis clinic to rapidly collect volumetric flow rate, diameter, and depth in just seconds during existing visits via a bioresorbable implant (EchoMark) with >90% margins and an automated 3D ultrasound (EchoSure) to enable early decision-making and reduce catheter time.

Sonavex has secured a multimillion-dollar NIH grant to fund a large prospective randomized controlled clinical trial for EchoMark & EchoSure, and another NIH grant to advance its pipeline product EchoGuide to improve AVF cannulation. The company is currently raising a Series A-2 financing to support the non-dilutive funding. Comps in this space have exited for $225M - $1.1B in the last three years, ranging from clinical to early commercial stages. 

David previously worked with multinational medical device companies to commercialize their technologies and provide long-term business strategies as a healthcare consultant at Health Advances LLC. David earned his B.S. in Biomedical Engineering with the highest distinction from the University of Rochester before receiving his Master’s from Johns Hopkins University. He was named “30 Under 30 in Healthcare” by Forbes in 2016 and “40 Under 40” by the Baltimore Business Journal in 2017.

David shares his background with Hall and discusses the differences between Sonavex and other companies in the industry. He advises entrepreneurs who are thinking about entering the space and mentions some of the challenges they may face.

You can visit Sonavex at www.sonavex.com, on LinkedIn at www.linkedin.com/company/sonavex, and on Twitter at www.twitter.com/Sonavex

David can be contacted at dnarrow@sonavex.com, on LinkedIn at www.linkedin.com/in/david-narrow-a4454023, and on Twitter at www.twitter.com/davidnarrow

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For more episodes from Investor Connect, please visit the site at: http://investorconnect.org  

Check out our other podcasts here: https://investorconnect.org/ 
For Investors check out: https://tencapital.group/investor-landing/ 
For Startups check out: https://tencapital.group/company-landing/ 
For eGuides check out: https://tencapital.group/education/ 
For upcoming Events, check out https://tencapital.group/events/  

For Feedback please contact info@tencapital.group   

Please follow, share, and leave a review.

Music courtesy of Bensound.

Direct download: David_Narrow_of_Sonavex.mp3
Category:general -- posted at: 6:00am CDT

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