Section 1244 gets even shinier.
In usual capital loss situations, you really need capital gains to offset the losses against, because you can only take up to $3,000 in net capital loss in a given year. (You roll forward the rest to future years).
But under 1244, you don’t need capital gains to offset things against – you need ordinary income. Generally people have more of that, from work, interest income, and more liquid investments.
But here’s the extra benefit: you don’t even need that! You can take up to $50,000 in net ordinary loss in a given year (for a single filer; $100k if you are married-filing-jointly).
No-one likes to lose money on angel deals – but if you do Section 1244 makes your life a little better than if you had lost the same money on something else.