> That's horrible advice. Tax decisions should never drive business decisions until the amount of tax actually becomes a material financial statement item. If y

> That's horrible advice. Tax decisions should never drive business decisions until the amount of tax actually becomes a material financial statement item. If you let tax effects drive your business decisions as a startup, you end up with a structure more complicated than the most efficient option, and most of the future tax "savings" disappear to lost opportunities or maintenance of your "optimized" structure. Tax considerations should never be the sole driver of business decisions but that isn't a good justification for ignoring them. Founders, for instance, should know about 83(b) elections and Qualified Small Business Stock (QSBS). Incidentally, California is one of the few states in which the exclusion of gains from the sale of QSBS is not allowed. I would venture a guess that close to 100% of tech startup founders today have no idea what QSBS is even though it can allow them to eliminate up to 50% of their capital gains tax when they sell their company. Your comment seems to be based on the flawed assumption that legitimate tax planning involves complicated corporate structures. There's nothing complicated or expensive about choosing to reside in Nevada (because of the lower costs, business-friendly environment, etc.) and structuring your Nevada-based business as a Nevada corporation. That is far less complicated and expensive than, for instance, choosing to reside in California and structuring your California-based business as a Delaware corporation, which is something that a ton of California startups do based on the hopeful assumption that they're going to raise capital from investors who will require Delaware incorporation. > Nevada hasn't turned out so well for the many startups who have moved there. California isn't a panacea for startups either. For every Facebook, there are countless ventures that never took off. Startups fail at a very high rate. Wherever they're located.