The stock must be acquired between 27 SEP 2010 and 1 JAN 2011.

You then hold it for at least 5 years, and subject to the other provisions, it's exempt from federal tax (especially AMT!) when exercised.

So, this is a bet on LT capital gains rates circa 2016+. But, a bet that doesn't particularly cost anything, assuming you were going to start the business in the next 3 months anyway.

My reading is that one needs only to purchase the stock before Jan 1, 2011 and then hold it for at least five years. Gains from sale of the stock after that would then be taxed according to this new bill.

Ah, I guess it could be read that way:

"which includes a temporary exclusion for 100% of the gain recognized by non-corporate investors from the sale of qualified small business stock (“QSBS”) acquired after September 27, 2010 and before January 1, 2011"

so the dates apply to "acquired" rather than "recognized." It's pretty ambiguously worded.

I find it almost impossible to read the sentence your way because you'd have to split the phrase "acquired after September..."