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New York Tech Founders and Investors Mobilize to Fight Proposed Capital-Gains Tax Hike
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By Yuliya Chernova, WSJ Pro
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Good day. Some New York tech founders and investors are opposing a plan in the state legislature to increase taxes on capital gains for startups.
Tech:NYC, a nonprofit advocacy group for the city’s tech sector, has collected more than 1,000 signatures from founders and investors for a letter opposing the tax increase to be shared with state lawmakers. “We are very concerned that this proposal would weaken New York’s startup ecosystem, which is a key driver of the State’s economic growth,” the letter said.
The state Senate’s 2026-2027 budget proposal includes a provision that would impose city and state income tax on gains from startup exits, which are currently excluded from federal taxes, according to a description by the law firm Patterson Belknap Webb & Tyler.
The federal exclusion under the Qualified Small Business Stock regime allows eligible noncorporate investors to exclude up to 100% of capital gains from the sale of qualified stock up to $15 million. Most states follow the same exclusions as the federal government. However, California, home to many venture capitalists, doesn’t honor this exclusion, according to Institute on Taxation and Economic Policy, a nonprofit that published a paper saying the exclusion “enriches the wealthy.”
Democratic State Sen. Andrew Gounardes, who sponsored the proposal to tax QSBS gains, said in a social-media post that the tax break has “become a tax avoidance tool that mostly benefits corporate investors—especially venture capitalists in tech.”
Engagement with Tech:NYC’s letter was unusually strong, said Julie Samuels, the group’s president and chief executive. “These are not big companies,” she said. “This is about the startups, the founders of those startups, the early employees and the investors who invest in them.”
Read the full article
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And now on to the news...
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Much of the trading activity on platforms like Kalshi and Polymarket is focused on professional and college sports. DAVID BANKS/AP
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Sports bets on prediction markets. A bipartisan pair of U.S. senators introduced legislation Monday to prohibit entities regulated by the Commodity Futures Trading Commission, including prediction-market exchanges Kalshi and Polymarket’s U.S. platform, from listing contracts related to sporting events. The legislation is the first bipartisan Senate bill seeking to regulate prediction markets. The bill also seeks to prohibit “casino-style games” from being listed on the platforms, such as slot machine games, video poker, blackjack and bingo.
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30%
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The probability of a recession in the U.S. economy in the next 12 months, up 5 percentage points from earlier estimates, according to Goldman Sachs.
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Larry Fink’s Warning: Invest or Risk Getting Left Behind by AI
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Larry Fink said that investing is the best hedge Americans can make against the predicted economic disruption wrought by advances in artificial intelligence. The 73-year-old BlackRock chief executive called AI “the most significant technology since, at least, the computer,” while admitting its potential long-term effect on the nation’s labor market is an “enormously important question.” For everyday people, owning a piece of top companies through investment is crucial, Fink argued in his annual letter to shareholders.
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Women to Watch Honorees Discuss AI’s Effects on PE Processes
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Artificial intelligence is changing the way private-equity firms evaluate potential investment targets and reshaping other investment processes. A large majority of 145 private-equity fund managers recently surveyed by Neuberger Berman said they expect to increase their spending on AI tools that help them search for and analyze deals, monitor and improve the performance of portfolio companies, and make investment decisions. WSJ Pro Private Equity asked three of this year’s senior dealmaker Women to Watch honorees to describe how AI is shaping both investments and internal operations at their respective firms. Here are the main takeaways from those conversations.
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Correction: Bradley Tusk is founder and CEO of Doctronic investor Tusk Ventures. An article in Monday’s newsletter incorrectly said Tusk Venture Partners invested in Doctronic.
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Funds
Lead Edge Capital has raised $3.5 billion for its Fund VII to back growth-stage software, internet and technology-enabled businesses. The firm says this is its largest fund to date, bringing Lead Edge's total capital raised since inception to $9 billion.
Air Street Capital, a venture firm founded by Nathan Benaich, said it has raised more than $232 million for a third fund to back AI-first companies in North America and Europe. The firm said it will lead early stage rounds with checks of $500,000 to $15 million and make select growth investments of up to $25 million.
VitaminºC, a new venture capital firm, raised €18 million in a first close for its first early-stage climate fund. Operating from Zurich and San Francisco, the firm invests in pre-seed and seed in energy, food and agriculture, carbon removal, and human adaptation technology companies. The firm is led by Founding Partners Nathalie Moral and Sophie Lamparter. Lamparter said that VitaminºC expects to hold a final close for the fund of between €40 million and €50 million by year-end. —Yuliya Chernova
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Gimlet Labs, an AI-inference software startup, has raised an $80 million Series A round led by Menlo Ventures. San Francisco-based Gimlet Labs says its proprietary software stack automatically maps agentic workloads to the most suitable chips.
Worth, an Orlando-based fintech startup, has raised a $30 million Series A round led by Fulcrum Equity Partners, with participation from Amex Ventures and TTV Capital. The company’s software helps financial institutions underwrite and onboard small-business clients.
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Leo Radvinsky was early to see the opportunity in racy internet content. PHOTO: UNCREDITED
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