Funded Startups
CPA Firm for Startups backed by Venture Capital, Private Equity, and Family Offices – Miami’s Top Startup CPA Firm
Venture capital (VC) and other funded startups encounter distinctive challenges not commonly found in other business sectors. Institutional investors such as VC firms demand thorough financial reporting, surpassing what small businesses of similar revenue levels typically require. Furthermore, navigating stock options and convertible debt instruments has transformed startup accounting into a specialized niche.
Bette’s initial foray into startup accounting occurred immediately after her MIT graduation, assisting an MIT startup. Since then, she has dedicated her career to working closely with technology and startup enterprises. As the founder of a startup-focused CPA firm, Bette has contributed her expertise as a mentor at Incubate Miami, a pioneer in building South Florida’s startup ecosystem.
We manage the accounting and tax demands of funded startups, ensuring meticulous tracking of stock options and other financial intricacies. By engaging our services during the agreement drafting stage with your legal team, we can proactively address business and tax matters, preempting potential issues that may become challenging to rectify later on.
R&D Tax Credit
Getting the Research and Development Tax Credit
Congress has established tax credits specifically designed for businesses engaged in Research and Development (R&D). It’s important to note that the definition of R&D, as outlined by these regulations, is more expansive than commonly perceived. By meticulously documenting activities such as software development and initial product creation, we can maximize the utilization of these tax credits. Even if your startup anticipates delayed profitability, these tax credits serve as a valuable asset, bolstering your company’s value and attractiveness for potential exits. Recent legislative changes have also made it possible for R&D credits to offset payroll taxes, providing startups with immediate cash benefits.
Foreign Founder?
Foreign Ownership is Our Specialty
For startups with foreign ownership, there are unique reporting obligations to consider. Failing to file Form 5472, where necessary, can lead to a substantial $25,000 penalty—a significant consequence for a single oversight.
Additionally, the requirement for Federal Withholding on payments to foreign owners depends on specific tax treaties with their home countries. This necessitates a thorough document review and policy establishment. While complex cases may require a tax attorney, our firm is well-equipped to handle many such situations, often unfamiliar to local tax consultancies.
If your startup has foreign owners, it’s advisable to engage our services early in the business formation process. This enables seamless collaboration with your legal team, ensuring compliance with all requirements and optimizing your venture’s structure.
Stock Options are Complex
Have a CPA Firm That Understands
While the ultimate determination of your tax treatment hinges on IRS documentation, selecting the correct forms to file is a facet in which a proficient startup CPA can provide invaluable guidance. The IRS offers information on Stock Options; however, the regulations governing statutory and nonstatutory stock options can be intricate. Our approach involves collaborative meetings with founders and business attorneys to strategically structure your paperwork, thereby minimizing the tax implications associated with stock options.
Founder/Employee Stock Options
Tax Elections for Founders and Employees
Entrepreneurs often recognize stock options as future income but may overlook their tax implications. Proper planning can significantly reduce your tax burden.
The tax code allows you to choose when to be taxed—upon sale or receipt—and to set holding periods independently of vesting schedules.
Quick decisions can lead to substantial tax liabilities for later-stage employees and founders. Our expertise ensures you make informed choices to optimize your tax position.
In High Tax States, The Impact is Huge
The difference between standard income rates, up to 37%, and the long-term capital gains rate, capped at 20%, can lead to significant savings for founders expecting large earnings.
In high-tax states like Massachusetts, California, and New York, this oversight can be even more costly. Our expertise provides founders with clear guidance on stock option tax elections, helping them navigate the complexities of IRS paperwork.
Startup founders using platforms like TurboTax may find that poor documentation could lead to millions in unnecessary taxes.
Profitability is Important
Even Startups Need to Plan For Profitability!
Startups often anticipate losses over several years, but it’s essential to distinguish between “good burn,” where you’re strategically building assets for future income, and “bad burn,” which results from poor controls, leading to losses without a foreseeable return on investment (ROI).
As a specialized CPA firm for startups, we understand this difference, which may not be clear to general CPAs. We can help you implement profitability strategies using the “Profit First” approach, ensuring that your revenue-generating efforts yield significant profits, even if the company is running at a loss. This improves your financial health and enhances valuations for future funding or exits.
Profit First for Startups
Startup Focused CPA Firm That Adapted Profit First
While most Profit First professionals may not possess the specialized knowledge to assist startups effectively, our distinctive expertise in working with Technology and Biotech Startups, in addition to local businesses, empowers us to adeptly apply these methodologies to enhance the financial management of startups. Our focus is on helping startups boost their valuations by implementing stronger financial controls.
We will collaborate with you to ensure that your business’s offerings remain profitable, even during rapid growth phases characterized by capital expenditure. This approach facilitates a smoother transition toward profitability as your company progresses towards potential milestones like acquisition, IPO, or achieving unicorn status.
Your CPA Firm
Our focus is on serving YOU, not your investors.
Startup founders usually prioritize their passion for product innovation over diving into the details of accounting and finance. While it might be tempting to hire the CPA firm recommended by your investors, it’s crucial to understand the potential conflict of interest when your CPA firm depends on your investors for ongoing business.
At our firm, we are dedicated to working for you and your management team. Our primary goal is to help your business grow for the benefit of all stakeholders, not just the investors.
Startup Expert CPA – More Info
Forward Looking
In our forward-looking approach, we’ve operated in the cloud for seven years, exclusively utilizing SaaS systems. We deeply understand your business landscape and seamlessly align with your operations.
Intelligence
Junior-level tasks are handled by our junior staff to manage costs, while all high-level discussions are led by Bette. With her background in engineering from MIT and a Master’s Degree in Accounting, she possesses the expertise to engage at any level.
Firm Structure
Bette has served as a mentor with Incubate Miami and actively collaborates with startups in Boston, New York, and Miami. Whether you require accounting services, advisory support, or an independent director, Bette is equipped to provide assistance.
Startup Companies Need the Right CPA Firm
Let’s see if we’re compatible, schedule a Zoom Meeting today.
Startups are unique businesses with special needs. You also require a CPA Firm that prioritizes your interests over those of your investors. We’ll assist you at every stage of your business journey, from handling tax matters before generating revenue to developing key performance indicators (KPIs) as you strive for unicorn status.
Should the right opportunity for an exit emerge, you can enter negotiations with confidence, knowing that your company’s financials are well-prepared for presentation in the data room. Making the right choice when selecting an accounting firm is crucial for your startup’s success, and we invite you to schedule a Zoom meeting with Bette today to ensure you embark on this path with assurance.
VC and Other Funded Startups CPA Firm FAQs
What does a startup-focused CPA firm do for funded companies?
We handle GAAP bookkeeping, monthly close, ASC 606 revenue recognition, FP&A and runway reporting, board packages, audit readiness/data-room prep, stock option and cap table accounting, multi-state tax, and federal/state filings.
When should a startup hire a CPA—pre-seed, seed, or Series A?
As early as pre-seed if you issue equity or SAFEs/notes. By seed, investors expect clean books and KPIs; by Series A, you’ll need GAAP financials, revenue policies, and a close calendar to support diligence.
How do SAFEs and convertible notes affect accounting and taxes?
They impact capitalization tables, EPS, and potentially create interest/derivative considerations. We track conversion terms, valuation caps/discounts, and book entries so your financials tie to legal docs at conversion.
What is a 409A valuation and why do I need one?
A 409A sets fair market value for option strike prices and helps avoid punitive taxes on equity comp. Obtain one before granting options (and at least annually or after material events) and align with your board approvals.
What is the difference between ISOs and NSOs for employees and founders?
ISOs can qualify for favorable tax if holding periods are met; NSOs are typically taxed as ordinary income at exercise on the spread. We coordinate grant design, exercise timing, and reporting to reduce tax surprises.
Should founders file an 83(b) election?
If stock is subject to vesting, an 83(b) election within 30 days of the grant may shift ordinary income to grant date value and start the capital-gains holding period. We assess pros/cons and provide filing steps and reminders.
How are equity grants and option exercises reported for payroll and year-end?
Equity comp can trigger W-2 income, withholding, and employer taxes. We set procedures for exercise/withholding, coordinate with payroll, and prepare year-end reporting (W-2/W-3, 3921, and state equivalents).
What KPIs should our board see each month?
Cash runway, burn multiple, gross margin, CAC/LTV, net revenue retention, ARR/MRR growth, payback period, and hiring pipeline. We tailor metrics to your model (SaaS, marketplace, hardware, biotech) and automate dashboards.
How do you prepare startups for audits and due diligence?
We implement a monthly close checklist, reconcile bank/AR/AP/expense cards, document accounting policies, lock periods, and create an organized data room (financials, legal, tax, HR, IP, revenue, and contracts).
Can my startup claim the R&D tax credit even if we are not profitable?
Often yes. Qualified research expenses can generate credits that may offset payroll tax (subject to limits). We document projects, wages, and contractor costs, and coordinate timely elections to monetize credits sooner.
What is Section 174 and how do software development costs get treated?
Certain research and software development costs must be capitalized and amortized under Section 174 rules. We identify which costs qualify, separate them from 162/263(a) expenses, and maintain support for tax filings.
Do we owe sales tax on SaaS or digital products across states?
Possibly. Economic nexus rules trigger collection once you pass state thresholds, and SaaS is taxable in many states. We perform a nexus review, register as needed, configure your billing system, and file returns.
How do foreign founders and foreign investors change our compliance?
Expect Forms 5472 (related-party reporting), 1042/1042-S withholding where applicable, W-8BEN(E) collection, transfer-pricing documentation, and treaty analysis. We set policies early to avoid penalties.
What entity and state of incorporation work best for venture-backed startups?
Delaware C-corp is standard for VC terms, equity plans, and exits. We coordinate with counsel on charter, option pool, and investor rights, then align accounting/tax for multi-state payroll and operations.
How do you manage multi-state payroll and remote teams?
We track employee locations, register for withholding/unemployment, manage state filings, and reconcile payroll to the GL. We also handle contractor review to avoid misclassification penalties.
Can Profit First principles help venture-backed startups?
Yes—adapted to startups, Profit First disciplines cash allocation, reserves, and spend controls without starving growth. We combine it with FP&A so capital is deployed toward milestones that move valuation.
What does “good burn” vs. “bad burn” mean for founders and boards?
Good burn builds assets (product, IP, revenue engine) with measurable ROI; bad burn is untracked spend without outcomes. We map spend to milestones, budget vs. actuals, and cut or reallocate to extend runway.
How do we get started with your startup CPA services?
Book a consult, share your cap table, legal docs (SAFEs/notes/option plan), prior financials, and payroll/export data. We deliver a cleanup and close plan, KPI pack, pricing, and a 90-day roadmap to investor-ready financials.
