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Probably a stupid question, but if you're bootstrapping a startup into which you might (but also might not) take investment at some point, wouldn't it be better
by biztos 10y ago
Probably a stupid question, but if you're bootstrapping a startup into which you might (but also might not) take investment at some point, wouldn't it be better to do whatever has the lowest cost and administrative overhead, and then sign over all its rights/assets/etc. to a fresh Delaware C-Corp when/if you have investors ready?
So for example if you're in California you might do a California LLC until/unless you have a VC ready to back you. Or if you're in Germany you might do a UG (aka "mini-GmbH").
The point being to get yourself a legal structure and liability protection at the lowest possible cost in both money and distraction, and if it turns into something you want to sell some or all of to Silicon Valley you make a new company to own the old company's assets.
IA(obviously)NAL but it seems like you should keep things simple until you need them to be a certain way.
- brianwawok 10y agoYes. This is what most people do. The C Corp making no profits with no employees is a total waste.
- parkaboy 10y agoYep, this is essentially what we did and worked out pretty well (assuming the operations/accounting under LLC stays super simple).