I upvoted you and would agree that encouraging creativity, new enterprise formation and investment in new ideas are all positives that the policy is chasing.

I think this policy is not a very effective means to that end. QSBS does not reduce the probability of startup failure. You can increase the financial rewards of startup success, but at a certain point this becomes less-and-less effective, because of risk aversion, and because of the declining utility of money.

This is why I say it is a give-away. Because in most cases it won't change the calculus of starting/investing in a startup from "not worth it" to "worth it." It just changes how rich the founder/investors are in the case that the startup succeeds.

I reflect on my own experience: the existence or non-existence of QSBS did not and would not have any bearing on starting my own business. This is of course N=1, so take it with a grain of salt.

I would just conclude by saying: QSBS is not a give-away only if it changing behavior. I'm not sure I believe that it actually changes startup or investing behavior.

I will grant that my experience is as a founder, and not an investor. It's more plausible that investors, who can diversify their investments, would have their behavior affected by QSBS. QSBS changes expected value of investment, though I have no idea how much early-stage investors can calculate that.

I also don't subscribe to the theory that more investment entails more creativity and innovation. I suppose that's a founder-biased point of view.