Section 174 Is Creating a Cash Crisis for R&D-Heavy Startups — and It's About to Hit VCs and LPs Hard

(Which Fund Strategies Are About to Get Smoked — and Which Ones Can Just Chill)

Running an early-stage deep tech or biotech fund?

Bad news. You're about to get dragged barefoot across a gravel parking lot, and the IRS is driving the truck.

Doing boring old industrials or real estate? Congrats.

Pour yourself a drink, light a cigar, and toast to "minimal R&D exposure."

In the post-Section 174 world, LPs aren't just looking at your logos or your last brag deck.
They're asking real questions now:

• How much cash flow risk are you hiding under that pretty IRR?

• How likely are your companies to get body-slammed by a surprise tax bill?

• Are you even aware this is happening, or are you about to find out during your next quarterly update call?

Here’s the no-bullshit breakdown:
Fund managers ranked from "brace for impact" to "vibe check only."