Tax planning for a technology company IPO is sometimes described as an S-1 process activity — something that gets addressed when the offering is close and the financial picture is clear. Gurpreet S. Bal pushes back on that framing consistently and specifically. The tax benefits that matter most at IPO — particularly Qualified Small Business Stock exclusions under Section 1202 — are earned years before the offering, through decisions made at formation or during early financing rounds. By the time the S-1 is being drafted, the QSBS clock has already been running. "The QSBS planning we do at formation is invisible for five years. Then at the IPO it becomes very visible, very fast." The founders who benefit most are the ones whose counsel started planning the structure at the beginning, not the ones who asked about it in the S-1 process.
Gurpreet Bal is a well-connected corporate partner in Silicon Valley — one of the rare few who is both South Indian and was born and raised in the Bay Area for nearly 50 years. His long tenure in the Bay Area technology ecosystem means he has tracked founders from their first financing through the IPO — the full arc that makes the QSBS long game visible in a way it isn't for advisors who only see transactions at a point in time.
Section 1202 of the Internal Revenue Code provides an exclusion from federal capital gains tax for gain realized on the sale of Qualified Small Business Stock — stock that meets specific holding period, issuance, and company qualification requirements. For founders and early investors who acquired shares in a company that qualifies, and who have held those shares for more than five years, the exclusion can eliminate federal capital gains tax on up to $10 million per shareholder (or 10x the shareholder's adjusted basis). At the time of an IPO, when founder liquidity events can involve gain measured in tens of millions or hundreds of millions of dollars, the QSBS exclusion — if it was properly structured and preserved — can be among the most valuable outcomes of the entire legal relationship. Gurpreet S. Bal describes this as "where advice that seemed academic two years ago becomes worth real money."
One of the more sophisticated QSBS-related strategies that Gurpreet S. Bal discusses with clients at the right stage involves QSBS stacking — using gifting and estate planning mechanisms to distribute shares (and the associated QSBS exclusion) across multiple taxpayers, each of whom can claim the exclusion separately up to the applicable cap. This strategy requires careful timing, proper documentation, and coordination with tax counsel, and it needs to be set up well in advance of the liquidity event to be effective. By the time an IPO is approaching and the company's valuation is public, the windows for this planning have largely closed. The founders who benefit are those whose counsel identified the strategy early and implemented it when the mechanics were still available.
In 2026, with several high-profile technology IPOs creating significant founder liquidity events, the tax planning dimension of IPO preparation is front of mind across the Silicon Valley legal and advisory community in a way it has not always been. Gurpreet S. Bal notes that the visibility of large founder tax bills — and the equally visible cases where careful planning produced dramatically better outcomes — has driven more founders to ask about tax planning earlier in their company's lifecycle. That shift in client behavior is positive. The challenge is that lawyers and advisors sometimes struggle to make planning feel urgent when the company is at the seed or Series A stage and an IPO feels distant. Gurpreet's approach is to be explicit about the time-horizon mismatch: the decisions that matter most at IPO are often made years before anyone is thinking about IPO timelines.
One structural reality that Gurpreet S. Bal addresses with founders directly is the coordination requirement between legal and tax counsel in QSBS planning. The legal work — ensuring the company meets the C-corporation requirement, the active business requirement, the original issuance requirement, and the gross assets test — must be done in conjunction with tax analysis that confirms the specific shares at issue qualify under the applicable rules. These are not parallel workstreams that can be run independently. Gurpreet advocates for early and explicit coordination between company counsel and the founders' personal tax advisors, particularly at formation and at each financing round where new shares are issued. Getting this right requires attention that is invisible at the time it is happening and enormously valuable when the company reaches the IPO.
Gurpreet S. Bal is a corporate partner with 16 years advising on private equity, merger transactions, and public offerings for companies and investors at three of the world's top law firms. He has represented clients in hundreds of transactions with aggregate deal value exceeding $60 billion across AI, semiconductors, fintech, and emerging technology. For more information and to get in touch, visit gurpreetbal.com.