Some interesting links we found across the web this week:
Do You Have to Pay Taxes on Your PPP Loan?
Since the Paycheck Protection Program (PPP) started in 2020, the Small Business Administration has issued more than 5 million loans totaling more than $525 billion. A PPP Loan can be forgiven if more than 60% is spent on costs associated with payroll. This article from Entrepreneur discusses how a forgiven PPP loan is completely tax-exempt and does not result in taxable income, along with other tax issues related to the PPP loan.
How to Prepare Your Startup for Investor Scrutiny
Startups and entrepreneurs have to successfully navigate the due diligence process in order to attract investment. This AlleyWatch article discusses ways to prepare for the due diligence process including keeping the whole team up-to-date on the plan, identifying any personnel issues, and resolving any customer or vendor issues in a way that can be proactively communicated to potential investors. With full candor and no surprises, a company can be well-positioned to survive due diligence.
Private Equity Could Face a Reckoning as Power Shifts in Congress
With a new administration and Democrats controlling both houses of Congress, the private equity industry could face new regulatory scrutiny. This article by Pitchbook discusses the Stop Wall Street Looting Act introduced by Senator Elizabeth Warren. The bill includes provisions that would tax capital gains as regular income and prevent a private equity firm from issuing dividends on a portfolio company for the first two years of ownership. However, Congress has many other pressing priorities which may cause private equity regulation to take a back seat.
Public Market Verdict: The Unicorn Binge Wasn’t Crazy; It was Really Profitable
There are currently 300 unicorns in the US—companies valued at $1 billion or more. This Crunchbase article discusses how recently public companies are not only getting a public launch bump in price, but are seeing increasingly steady growth over the long-term. Airbnb, Snowflake and DoorDash all went public in the latter half of 2020 and all saw increased capitalization since their debuts.
The Post-Pandemic Office Dilemma: Who Returns and Who Works From Home?
Companies were quick to adopt work-from-home policies in 2020. However, with COVID-19 vaccines being distributed, companies will have to deal with the question of who returns to work. This article by Fast Company discusses how companies who have made large investments in remote work technology will need to keep those systems updated if they plan to keep workers remote. They should also consider how perks and amenities in the office can be translated to create a similar sense of culture and belonging at home. Lastly, companies should consider being flexible with employees who want a hybrid working experience: only coming to the office when their team or project requires it.