In this session, we will address the federal income tax issues applicable to “Simple Agreements for Future Equity” (“SAFEs”) and convertible and other venture-style debt that commonly arise in venture financing transaction. In particular, we will consider the debt, equity or other tax classification of each instrument and related issues, including qualification as “qualified small business stock” (“QSBS”) and the potential for preferred dividends under Section 305. In addition, we will discuss the application of these principles to both corporations and LLCs and address common related issues when these instruments are used in VC transactions, including those bundled with penny warrants, pay-to-play and recapitalizations.