Vermont's Big Win: How Beta's $7.5B IPO Could Pump Millions Back into State Coffers and Startups
If Vermont residents and Vermont-based fund Limited Partners liquidate $500 million in Beta stock during 2026 and 2027, the state could collect between $35 million and $40 million in one-time revenue
As Beta Technology’s wealth converts to cash over the coming year, money will flow back to the state through multiple distinct channels—including three Vermont-based investment funds with substantial local ownership and hundreds of millions in potential capital gains taxes.
When Beta Technologies rang the opening bell at the New York Stock Exchange on November 4, 2025, the South Burlington aerospace company’s $1 billion Initial Public Offering created something Vermont rarely sees: a homegrown company valued at $7.5 billion.
Behind that valuation lies a financial story with direct implications for Vermont’s public finances and residents. Three Vermont-based venture capital funds—all with substantial Vermont ownership—hold stakes in Beta’s success through early investments. Meanwhile, Vermont residents—from the company’s billionaire board members to its 800-plus employees—now hold equity worth billions. As that wealth converts to cash over the coming year, the financial impact on Vermont could be far larger than initially anticipated.
Here’s how the financial mechanisms work, when the money arrives, and where it ultimately goes.
Multiple Paths for Multiple Streams of Money
Vermont’s financial interest in Beta Technologies flows through several separate channels, each with different rules, timelines, and beneficiaries.
The first involves equity stakes held by two Vermont-based venture capital funds that backed Beta when it was a risky startup: the Dudley Fund, and the HULA Fund. These funds now hold shares potentially worth hundreds of millions of dollars, and the structure of each determines how those returns flow back into Vermont’s economy.
The second involves the personal income taxes Vermont will collect when Beta’s founders, executives, and employees—many of them Vermont residents—sell their newly valuable stock and realize capital gains. Given the size of the positions held by Vermont residents, these tax collections could reach $500 million or more in liquidations, generating tens of millions in state revenue.
Two Additional Funds: Returns That Become Taxable Income
The Dudley Fund invests in early-stage Vermont companies, and its Limited Partners are almost entirely Vermont residents. Beta Technologies is listed as an investment on the fund’s website. When the Dudley Fund sells its Beta shares and realizes gains, those returns are distributed to each Limited Partner, who must then report the proceeds as capital gains on their Vermont and federal tax returns.
This structure means the Dudley Fund’s Beta windfall generates state tax revenue directly. Each Vermont-resident Limited Partner will owe Vermont income taxes on their share of the gains. Net proceeds are then used as decided by each individual Limited Partner—for personal spending, reinvestment in a future fund or new company, or for philanthropy.
The HULA Fund, a subsidiary of Hula Lakeside, also owns a substantial position in Beta on behalf of its limited partners, many of whom are Vermonters. Beta is listed as an investment on the HULA Fund’s website. Like the Dudley Fund, HULA’s returns flow through to Limited Partners as taxable income rather than staying locked in a revolving investment fund.
The combined effect is significant: Vermont has three separate funds with meaningful Beta positions, and two of them (Dudley and HULA) will generate direct tax revenue when they liquidate, while the third (Vermont Seed Capital Fund) potentially expands Vermont’s capacity to fund future startups (see editor’s note). The magnitude of Vermont’s financial benefit from Beta is considerably larger than a single fund’s returns would suggest.
Calculating the Revenue: A Much Larger Number Than Initially Estimated
The initial estimates of Vermont’s tax windfall from Beta appear to have been significantly understated. When factoring in the combined positions held by Beta’s Vermont-resident founders, board members, employees, and the Limited Partners in the Dudley Fund and HULA Fund—both of which have high Vermont resident participation—the potential capital gains realizations could reach $500 million or more.
If Vermont residents and Vermont-based fund Limited Partners liquidate $500 million in Beta stock during 2026 and 2027, applying an effective tax rate of roughly 7-8% on those gains suggests the state could collect between $35 million and $40 million in one-time revenue over this period. This figure could rise further depending on the actual liquidation amounts and the specific tax situations of individual shareholders.
To put this in perspective:
Kyle Clark controls stock and trusts worth over $235 million
John Abele controls approximately $550 million in Beta stock
Over 1 million shares (valued at more than $40 million) were reserved for employees
The Dudley Fund’s Limited Partners, almost entirely Vermont residents, will receive their pro-rata share of gains
The HULA Fund’s Limited Partners, many of whom are Vermonters, will receive their pro-rata share of gains
If even half of these positions are held by Vermont tax residents and liquidated over the 2026-2027 period, the tax revenue substantially exceeds earlier projections. The $500 million estimate may itself prove conservative given the scale of Vermont participation across all three investment funds and direct employee and founder holdings.
Where the Money Actually Goes
For the Vermont Seed Capital Fund potential windfall: It stays within the fund to back new startups. A $20 million to $50 million infusion would allow the fund to write larger checks, support more companies, and provide follow-on funding to prevent dilution of the state’s interest in growing firms.
For the Dudley Fund and HULA Fund returns: These flow through to Limited Partners—predominantly Vermont residents—who pay capital gains taxes to Vermont and then deploy the net proceeds as they see fit. Some will reinvest in new Vermont ventures, some will fund philanthropic causes, and some will use the proceeds for personal purposes. All of these uses keep substantial wealth circulating in Vermont’s economy.
For the direct shareholder tax revenue windfall: It flows into Vermont’s General Fund for the fiscal year 2027 and 2028 budgets. The legislature will debate how to appropriate this one-time revenue surge. At a potential $35 million to $40 million or more—substantially larger than initially projected—the amount represents meaningful fiscal capacity for infrastructure, housing, capital investments, or one-time property tax relief. While still modest relative to Vermont’s $8.5 billion biennial budget, this represents one of the largest one-time tax windfalls in recent Vermont history.
The ongoing benefit extends beyond these one-time financial events: 800-plus Beta employees paying income taxes year after year, continued economic activity in South Burlington, newly wealthy Vermont residents and fund Limited Partners with capital to invest in other Vermont businesses, and Vermont’s enhanced reputation as a place where billion-dollar companies can be built.
By summer 2026, all three Vermont-based funds—the Vermont Seed Capital Fund, the Dudley Fund, and the HULA Fund—should begin receiving cash from Beta share sales. The Vermont Seed Capital Fund will expand its capacity to invest in new Vermont startups, while the Dudley Fund and HULA Fund will distribute returns to their Vermont-resident Limited Partners, who will pay capital gains taxes and then deploy the proceeds for spending, reinvestment, or philanthropy.
By fall 2026, the state should see substantially increased estimated tax payments flowing into the General Fund—potentially reaching $35 million to $40 million or more over the 2026-2027 period rather than the $12 million to $16 million initially projected. And by spring 2027, when final tax returns for 2026 are filed, Vermont will know the precise magnitude of its revenue gain.
The Beta Technologies story represents a rare convergence: a policy bet made in 2010 to address Vermont’s capital gap has produced both a sustainable investment engine for future entrepreneurs and a measurable fiscal benefit for state finances that appears significantly larger than initial projections suggested—assuming the stock price holds and the certification timeline stays on track.
With three Vermont-based funds holding substantial positions and high Vermont resident participation across multiple investment vehicles, Beta’s success could represent one of the largest wealth-creation events in modern Vermont history.
Correction: For what it's worth, the "Vermont Seed Capital Fund. LP" is not a shareholder, though some shares may be in the process of being donated to this evergreen fund