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Hmm, I'm not sure that's accurate. What would you be converting to if your company was already a C-Corp?
by andrew_gust 10y ago
Hmm, I'm not sure that's accurate. What would you be converting to if your company was already a C-Corp?
- tptacek 10y agoA C-Corp with the structure your venture capital firms expect.
- andrew_gust 10y agoPart of the premise of Gust Launch is that it's far simpler to start this way, as a Delaware C-Corp with expected structure, than it is to convert later. The conversions range from easy to extremely painful but they're almost all avoidable.
- koolba 10y agoThere may be more structure required but starting off from a C corp obviates the need to transfer control of assets (particularly intangible ones like copyrights to source code).
- tptacek 10y agoYou're paying a substantial amount of money up front to hypothetically mitigate a hypothetical future expense that only occurs at the point where cash flow (at least on the order of "covering legal expenses") stops being an issue. That doesn't sound like a good deal to me, but that's just, like, my opinion, man.
- koolba 10y agoQuantify substantial. Last time incorporated a Delaware C corp it cost me a couple of stamps and filing fees. I don't remember exactly but it definitely wasn't an obscene number. The annual upkeep, including franchise tax and registered agents, is around $600. If you're not going to have a nexus in another state (i.e. No physical location or storefront) then that's peanuts for having a corporate vehicle in the the state for corporate vehicles. If the cost difference of a couple hundred bucks is enough to break your bank, I'd suggest finding a 9-5 job rather than incorporating.
- amyjess 10y agoCan you elaborate? Operational and structural details like this have always fascinated me.