LLCs pass losses and gains through to their "members" (the equivalent of a C Corp's shareholders). While this can be tax advantageous to closely held firms, it

LLCs pass losses and gains through to their "members" (the equivalent of a C Corp's shareholders). While this can be tax advantageous to closely held firms, it creates significant complexity for professional investors. As a result, professional investors typically insist companies they invest in be C Corporations. As for Delaware, there's the most legal precedent on corporate law in the state making its rules the most predictable. Uncertainty increases risk and, therefore, decreases investors' interest. There are lots of things you should be innovative on when starting a company, corporate structure is almost never one of them. If you're starting a business and think you may raise money from professional investors, incorporate as a C Corp in Delaware.