So you create it. You decide to fundraise, and that capital will help you succeed. You pay yourself a salary of $100,000/year, and put everything else into the company.
You raise $4 MM in a seed round, valuing your company at $20MM.
10-months later, your company is doubling growth YoY again, has a solid SAAS model, and low churn. You decide to raise again.
This time, you raise some more money for your company, and you're now valued at 70MM.
About a year later, you're growing just as fast -- but you see a new competitor is entering the ranks. It's time to scale even faster. So you go and raise again. In a fantastic series-B round, spread across TechCrunch and HN, you raise again, at a $200 MM valuation.
As the sole founder, you now own 50% of the company -- making you worth $100MM. Your salary has remained constant at $100,000/year though.
And then the wealth tax hits.
The new wealth tax says you're responsible to pay an annual tax of 2% on all assets over $50MM. Starting this year.
Which means that you, as a private founder with no liquid assets, are now responsible for $50MM * 2% = $1MM in taxes this year.
Even though your liquid income is $100,000, and you have barely that much in your bank account -- you need to come up with $1,000,000 in liquid cash this year. And since your valuation probably won't go down, it'll be at least that much, every year, for the rest of your life, until you shutter the company.
So you go and try to liquidate your shares. But unfortunately, it's not a public company --- and it's not that easy finding private secondary-market buyers willing to buy the half of the founder's entire stake.
So what do you do now?
As far as I can tell, this is how the wealth tax would work for startup founders.