You want to keep your corporate structure as standard as possible. Anything out of the ordinary will scare off future investors, since it results in more risk.

You want to keep your corporate structure as standard as possible. Anything out of the ordinary will scare off future investors, since it results in more risk. This one investor is probably not worth losing a seed or A round in the future. And the VC's lawyers definitely will find anything non-standard. The standard (as I know it based on my experience in YC) is to incorporate in Delaware as a C-Corp, with a 4 year vesting period and 1 year cliff for the founders. Here's why: - Delaware has a TON of registered corporations, and thus a lot of existing case law which means there are less unknowns when it comes to tricky situations. I think their laws also make it easier for the company to operate in other states, and there may be tax benefits (not 100% sure about that). - C-Corps have shares and are structured to allow for outside non-involved investors, and protect these investors from corporate taxes. LLC's and partnerships make it harder to invest, and tax each person for the companies profit's instead of the company itself. - The 4 year vesting w/ a 1 year cliff incentivises founders to put in enough time to see the company through and protect the company / investors if it doesn't work out with a founder. The same applies to employee stock / option grants down the road. This is probably the most flexible one, and there is a lot of innovative companies that are trying out alternatives. Example 1: 6 year vesting w/ a 2 year cliff but larger overall equity grants to employees. Example 2: triggering the start of vesting for founders only after a milestone has been reached, such as ramen profitability or raising a seed round. This protects very early stage companies that will often need 1-2 years to figure out how to get on that breakout trajectory.