Before the pitch deck. Before the financial model. There’s the foundation: your legal structure.
The way you incorporate impacts everything — from taxes and equity to investor readiness. If you get it wrong, you’ll hit friction when it matters most.
What VCs Expect
If you want venture capital, there’s a short list of acceptable structures:
- Delaware C-Corp — The gold standard. Clean, familiar, and preferred by institutional investors.
- LLC or S-Corp? Not for VC. These limit ownership types, create tax complexity, and make equity planning a mess.
- Foreign entity? You’ll need to “flip” into a U.S. parent structure before most U.S. VCs will engage.
VCs don’t just fund great ideas — they fund clean vehicles.
Why Delaware?
- Clear corporate governance
- Well-established legal precedent
- Flexible equity and board control
- Easy to issue preferred shares and SAFEs
- Required by most major VCs and accelerators
It’s not about tradition. It’s about frictionless fundraising.
Equity Setup Matters
The wrong legal setup can derail your cap table. Key considerations:
- Founder vesting schedules
- Option pool authorization
- Bylaws that match investor rights
- IP assignment to the company
- Board seat terms and voting thresholds
Get this wrong, and diligence slows — or stops.
When to Work With a Startup Lawyer
Fast answers from Reddit and Twitter are not strategy. If you’re raising, hiring, or structuring a team, partner with a lawyer who understands venture.
You don’t need to overspend. But you do need to get it right.
We help founders avoid legal landmines by aligning structure, equity, and investor expectations from day one.
Fundraising starts with formation — not just the pitch.
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