Should a tech startup incorporate as an LLC, a C-Corp, or an S-Corp? If so, why?

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Kruze Consulting Startup Q&A Author
Vanessa Kruze Founder, CPA

If you are raising Angel or VC capital, absolutely incorporate as a C-Corp. LLC’s and S Corps create tax problems for Venture Capital Funds and their institutional investors. Don’t go there. File as a Delaware C-Corp. Every major startup law firm will help you do this quickly and cheaply.

At Kruze Consulting, we see founders mess this up all the time. Please, work with a reputable startup law firm like Goodwin, Wilson, Orrick, Gunderson or the many others in the startup ecosystem. A good startup lawyer has a simple incorporation package they will take you through. It’s cheap, easy and keeps you from making simple mistakes like incorporating any other way but as a Delaware C Corp.

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