by Dan O’Connor, Excendio Advisors
Introduction
The One Big Beautiful Bill Act (OBBBA) introduces new rules that directly affect ownership structures, equity allocations, and long-term exit planning. For IT founders and owners, it represents both a compliance requirement and a major valuation opportunity.
OBBBA is reshaping the way IT and software companies approach strategic planning. While many founders and owners view it as another layer of compliance, in reality OBBBA introduces both risks and opportunities that can directly impact valuation, exit readiness, and long-term growth strategies. For IT founders and owners, the question is not whether OBBBA applies, but how to position their company to capture its advantages.
Why OBBBA Matters Now
For IT founders and owners, OBBBA is not simply a tax bill — it’s a strategic reset that directly influences valuation, exit readiness, and negotiation strength. Its provisions shape how buyers perceive risk, how investors assess governance maturity, and how owners convert enterprise value into personal wealth.
- Governance Discipline as a Valuation Driver: In today’s M&A environment, governance isn’t a box-checking exercise — it’s a valuation lever. OBBBA readiness signals foresight reduces diligence friction and can add credibility that translates into stronger multiples.
- Equity Alignment and Qualified Small Business Stock (QSBS Opportunity: The new tiered QSBS rules mean that ownership structure and issuance decisions now carry far greater weight. Cap tables that maximize eligibility create significant wealth events for founders and employees, while poorly structured ones leave millions untapped.
- EBITDA Optics and R&D Strategy: With §174 expensing restored, domestic R&D spend can now improve reported EBITDA. For founders, this creates a dual opportunity — strengthening the valuation narrative while also building defensible intellectual property that buyers will pay a premium for.
- Debt & Capital Structure Implications: Under §163j, interest deductibility has changed. For growth-stage firms and PE-backed IT companies, this reshapes how financing strategies impact after-tax income and valuation metrics. Owners who anticipate these changes can avoid unpleasant surprises during diligence.
- Exit Readiness & Buyer Psychology: In competitive processes, buyers reward companies that demonstrate foresight and governance maturity. OBBBA readiness lowers perceived risk, shortens diligence timelines, and positions sellers to negotiate from strength. Conversely, gaps in compliance become excuses for buyers to delay, discount, or walk away.
- Personal Wealth and Legacy Planning: Beyond enterprise value, OBBBA affects how wealth is transferred, preserved, or diluted. Estate planning, trusts, and liquidity strategies are now directly tied to exit outcomes. Owners who fail to integrate these considerations early risk losing optionality — and value — when it matters most.
👉 Put simply: OBBBA is not background noise. It is a valuation blueprint that can determine whether an IT founder exists with maximum proceeds or leaves value on the table.
Key OBBBA Provisions for IT and Tech Companies
- Qualified Small Business Stock (QSBS — §1202):
OBBBA expands §1202 into a tiered exclusion system: partial gain exclusions at 3 years and 4 years, and full exclusion at 5 years. For founders and employees, this creates earlier liquidity opportunities and flexibility in exit timing. For IT companies, where growth cycles can be unpredictable, optimizing the cap table for QSBS eligibility can mean the difference between capturing millions in tax-free gains or losing them entirely. - R&D Expensing (§174):
Domestic R&D costs are once again immediately deductible, restoring a powerful valuation lever for software and IT services firms. While this boosts reported EBITDA and cash flow optics, the real opportunity is strategic — aligning R&D spend with defensible IP creation and long-term product roadmaps. For founders, this provision rewards discipline: R&D that produces lasting differentiation commands higher multiples, while ad hoc spending raises red flags. - Interest Deduction (§163j):
OBBBA adjusts the calculation of deductible interest, a major consideration for growth-stage IT firms that rely on leverage or for PE-backed companies with aggressive capital structures. Poorly planned debt strategies could reduce after-tax profitability and weaken valuation optics. Founders must anticipate these changes — buyers will certainly evaluate whether interest deductibility aligns with sustainable earnings. - Pass-Through Deductions & SALT Caps:
Changes to §199A deductions and state-and-local-tax (SALT) caps alter how S corps, LLCs, and partnerships deliver after-tax value to their owners. For IT entrepreneurs with hybrid structures, these provisions directly affect take-home proceeds at exit. Structuring early around OBBBA ensures owners are not surprised by diminished liquidity when a transaction closes. - Capex & Depreciation (§179):
OBBBA reinforces the ability to expense IT-related capital investments under §179. For sellers, timing these elections can smooth EBITDA in the years leading up to exit. For example, deferring or accelerating equipment upgrades, hardware refreshes, or data center investments can materially shift reported earnings and negotiation optics. Buyers are increasingly sensitive to these accounting levers, making proactive planning critical. - Estate & Liquidity Planning:
OBBBA’s ripple effects extend beyond enterprise value into personal wealth. Trust structures, estate transfers, and secondary sales are now tied more tightly to compliance and timing rules. For founders, integrating estate planning early can secure long-term family wealth, while poor planning can lock equity into suboptimal structures that limit flexibility at exit.
👉 Collectively, these provisions are not technical footnotes — they form a valuation playbook. For IT and tech owners, OBBBA defines how value is created, preserved, and ultimately realized in a transaction.
Strategic Opportunities for IT Founders and Owners
OBBBA isn’t just about compliance — it’s about turning policy shifts into valuation levers. Founders who anticipate and act early can shape how buyers perceive risk, readiness, and long-term enterprise value.
- Equity Structuring for QSBS
- Align stock issuances and option grants to maximize eligibility under §1202.
- Early planning ensures founders, employees, and investors benefit from partial or full exclusions.
- A compliant, QSBS-optimized cap table not only creates personal wealth but also removes negotiation friction with buyers concerned about shareholder disputes.
- R&D as a Valuation Lever
- Use §174 expense strategically to strengthen EBITDA optics while investing in long-term innovation.
- Link R&D spend to product roadmaps, defensible IP, and patents — elements that buyers pay premiums for.
- Companies that treat R&D as disciplined strategy, not just spend, present stronger multiples in diligence.
- Capex and Depreciation Timing
- Leverage §179 expensing to optimize reported EBITDA ahead of an exit.
- Plan hardware refreshes, cloud infrastructure, or data center investments around exit timelines to minimize negative EBITDA impacts.
- Buyers will normalize these adjustments — sellers who manage timing proactively maintain stronger negotiating power.
- Governance as a Differentiator
- OBBBA readiness signals foresight, reducing diligence risk and accelerating deal timelines.
- Founders who demonstrate clean documentation, compliance discipline, and transparent reporting position themselves as “deal-ready.”
- This maturity can translate into higher multiples by lowering perceived risk for buyers and investors.
- Exit Planning Discipline
- Integrate OBBBA provisions into a 2–5 year exit strategy — not as last-minute clean-up.
- Anticipate how QSBS timing, R&D pipelines, and capex cycles align with transaction windows.
- Early planning allows sellers to tell a proactive story to buyers — one that commands premium valuation instead of reactive discounts.
- Personal Wealth & Liquidity Alignment
- Coordinate estate, trust, and liquidity strategies with OBBBA compliance.
- Well-structured ownership ensures founders can maximize after-tax proceeds and flexibility at exit
- Poor planning risks trapping equity in suboptimal structures, weakening negotiating strength or reducing take-home value.
👉 In short: OBBBA gives IT founders and owners a valuation playbook. Those who align equity, R&D, capex, governance, and personal wealth planning with OBBBA provisions will not only improve diligence optics but also maximize exit outcomes.
Critical Questions to Ask
When preparing for exit or investment, IT founders and owners should use OBBBA as a lens to uncover both strengths and vulnerabilities. These questions aren’t about compliance alone — they’re about how governance maturity translates into valuation outcomes:
- Cap Table & Equity Alignment
- Is your cap table structured to maximize QSBS eligibility for founders, employees, and investors?
- Are early equity grants or secondary sales creating disqualifications that could dilute after-tax outcomes?
- Will misalignment among stakeholders create friction during diligence or closing?
- R&D as Cost or Valuation Driver
- Are you treating R&D as a short-term expense — or as a strategic investment tied to defensible IP and product differentiation?
- Is R&D spend properly documented to withstand buyer scrutiny and tax review?
- Does your R&D pipeline align with customer needs and market positioning, or is it opportunistic and ad hoc?
- Debt & Capital Structure Under §163j
- How will your financing strategy hold up under OBBBA’s interest deductibility limits?
- Is debt enhancing growth or artificially inflating earnings optics?
- Could over-leverage trigger hidden tax drag or reduce free cash flow that buyers will penalize in valuation?
- Capex Timing & EBITDA Optics
- Are you timing capex and §179 elections strategically to present optimized EBITDA during exit windows?
- Could poorly timed investments lower multiples or invite buyer skepticism?
- Are you clear on how buyers will normalize earnings once capex timing adjustments are stripped out?
- Governance Discipline as a Signal
- Does your governance framework demonstrate foresight, or are fixes being made reactively under pressure of a deal?
- How will buyers interpret your readiness: as a marker of maturity or a red flag?
- Does your governance extend beyond financial compliance into areas like HR policies, cybersecurity, and customer contracts — the very areas buyers probe for risk?
- Personal Wealth & Legacy Planning
- Have you integrated estate planning, trusts, or secondary liquidity events in a way that aligns with OBBBA provisions?
- Will ownership structures help preserve long-term wealth, or complicate exit flexibility?
- Could delayed planning create constraints that force you to accept less favorable deal terms?
👉 These questions go beyond compliance — they are valuation stress tests. Clear, disciplined answers strengthen exit positioning. Weak or incomplete answers invite buyer skepticism, longer diligence cycles, and lower valuations.
Call to Action
OBBBA should be seen as more than compliance — it is a strategic signal. For IT founders and owners, understanding whether governance and tax readiness represent foresight and discipline, or gaps and risks, can mean the difference between protecting value and leaving millions on the table.
Excendio ensures that sellers view OBBBA not as a checklist, but as a strategic filter — one that separates companies positioned to command premium valuations from those exposed to discounts and delays.
👉 Connect with Excendio for a strategic conversation on OBBBA readiness. We’ll help you frame the right questions, sharpen your perspective, and approach negotiations with clarity about how governance maturity impacts valuation and deal dynamics.