Anonymous asked in Business & FinanceSmall Business · 4 weeks ago

Are tech startups funded as a tax write off for the invester?

It seems to be a new start-up popping up everyday but a lot of them just seem random as heck and doesn't seem like the money came from legitimate customer earnings to keep them in business.

Are all these new tech startups the product of a rich person just funding them as a tax write off and that's what keeps them afloat? 

2 Answers

  • Judy
    Lv 7
    4 weeks ago

    The rich people funding them are much more likely to be hoping they succeed, so the founder and the investor will make money. To get a tax writeoff they have to actually lose the money.

  • 4 weeks ago

    Until the business fails, its an investment.  

    I don't see why anyone would want to throw away money on a failing startup when they could donate that money and get an even better (easier) tax break.  

    Very few start-ups are self sufficient...they all have funding from some source, often just the capital of the founders.  

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