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Indeed. So why do VCs want to stuff the expenses inside the corporation?



Because recording an increased basis price means that they need to sell the stock for a higher amount to realize a gain (i.e., a profit). Individual VCs (i.e., angels) would prefer that, b/c it means lower taxable income. However, VC firms prefer the appearance of profitability, so every cost they don't have to take on themselves makes their fund look better.




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