Compliance
›

QSBS Attestation

QSBS eligibility and attestation letter

Review key criteria, confirm details, and export an accurate Qualified Small Business Stock (QSBS) attestation letter backed by your cap table data.
Get started
Book a demo
Dashboard mockup
Loved by 10,000+ companies from all stages of growth.
Features

Tools to verify QSBS eligibility and generate investor-ready documentation.

Generate QSBS attestation letter based off your cap table data.
Eligibility checks
Automated verification of C-Corp status, original issuance, and holder type.
Founder inputs
Guided fields for gross assets and active business confirmation.
Cap table accuracy
Pulls only original issuances directly from Cake’s data
Investor-ready letters
Generates a clear QSBS attestation PDF for diligence.
Reduced compliance risks
Replaces spreadsheets with a consistent workflow aligned to Section 1202 rules.
Clear record-keeping
Stores all eligibility checks and confirmations in one place for easy reference later.

See how Cake simplifies QSBS attestation.

Book a demo
How it works

From eligibility check to attestation letter, in a single guided workflow.

A simple, reliable process that helps founders confirm eligibility and export a trustworthy attestation letter.
1

Start with automatic checks

Cake verifies core requirements—C-Corp status, issuance type, and holder eligibility—based on your existing equity data.
2

Input business information

Enter gross assets under $50M at issuance and confirm active business status, two items that must be reported by the compan
3

Select which holders to include

Choose from a pre-filtered list of eligible shareholders to send the attestation letter to; transfers and ineligible items are automatically excluded.
4

Review the generated draft

Review a clean PDF that includes company overview, eligibility statements, and standard disclaimers expected by investors and advisors.
5

Export and share

Download an audit-friendly QSBS letter for diligence, tax preparation conversations, or future transaction needs.
Frequently asked questions

Your questions on QSBS, answered

Need help? Visit the Help center

Which Cake plans include QSBS?

QSBS attestation is available as an add-on to all paid plans.
See plans

What is a QSBS attestation letter?

A QSBS attestation letter is a company-issued document that outlines whether certain stock issuances may meet the Qualified Small Business Stock (QSBS) requirements under Section 1202. It supports investor diligence but is not a tax filing.

Who can receive a QSBS attestation letter?

Only shareholders who acquired stock directly from the company through an original issuance. Shares purchased in secondary transactions or transfers do not qualify.

Does Cake confirm if my company is definitively QSBS-eligible?

No. Cake verifies core criteria using cap table data and founder inputs, but it does not provide tax or legal advice. Final QSBS eligibility depends on shareholder circumstances, including holding period and individual tax position.

What QSBS criteria does Cake verify automatically?

Cake verifies:

  • U.S. C-Corporation status
  • Original issuance vs. transfer
  • Holder type (individual or trust)
  • Issuance type and equity class

Does Cake validate the $50M or $75M gross asset requirement?

No. Gross assets are self-reported by the company, as third-party validation is not available in this version.

Does Cake track the QSBS five-year holding period?

Not in this initial release. Future versions may include holding-period tracking for stock, option exercises, and 83(b) impacts.

How do restricted stock and 83(b) elections affect QSBS?

For restricted stock, QSBS eligibility depends on whether an 83(b) election was filed. With an 83(b), the holding period starts at grant. Without it, the holding period starts as shares vest. Cake does not currently track 83(b) filings.

Do option grants qualify for QSBS?

No. Options themselves do not qualify. Only the stock issued on exercise can qualify, and the QSBS holding period starts on the exercise date.

Can converted shares (common to preferred) retain QSBS status?

Generally yes. Tax-free conversions such as certain class conversions or reorganisations may preserve QSBS status, as long as the original stock issuance was QSBS-eligible. Cake does not assess conversion structures.

Does Cake store or verify supporting documents?

Cake stores the QSBS letter generated by the company. It does not verify supporting documents such as valuations, tax filings, or 83(b) elections

Which states follow QSBS rules?

QSBS is a federal exemption. Some states (e.g., California) do not conform. Cake does not track state-level conformity. Shareholders should check their individual state rules with advisors.

Who is responsible for the accuracy of the QSBS attestation letter?

The company is fully responsible for the accuracy of all information included in the letter. Cake provides tooling and workflow but does not audit or certify eligibility.

When should a company provide a QSBS attestation letter?

Common triggers include:

  • Fundraising due diligence
  • Secondary sales
  • Investor onboarding
  • Tax preparation discussions
When should a company provide a QSBS attestation letter?

Common triggers include:

  • Fundraising due diligence
  • Secondary sales
  • Investor onboarding
  • Tax preparation discussions

Equity doesn't have to be complicated. Join Cake and see for yourself!

Get startedBook a demo
5-star rating5-star rating5-star rating5-star rating5-star rating
5-star Rating
150 Horizon Ave. Venice, CA 90405, United States
ABOUT
PRODUCT
LEARN
RESOURCES
PrivacyTerms & Conditions
© All rights reserved 2025
|
Privacy PolicyLEgal Hub
ISO/IEC 27001 Information Security Management CERTIFIEDNASPP National Association of Stock Plan ProfessionalsOpen Cap Table Coalition