(We might be the only two people reading these comments.)
I agree that equity compensation is a headache in an LLC compared to that of a C-Corp. But I'm not sure how much money we really had to spend to do it.
I do not agree that having an LLC will meaningfully impact your funding. Obviously, nobody is going to fund an LLC. But you'll work out terms on the premise that you'll do a conversion or reincoporation/merger, and the legal for doing that will be part of your closing costs. Friends who have gotten funded under a C-Corp have told me they had to do this anyways, because VCs wanted the corporation on their paper anyways.
It's a little bit like saying that nobody will fund an actual sole proprietorship. That's true, they won't. But they'd prefer it if you came to them in that form! Because that's the cheapest corporate form to convert to their preferred form.
I agree that equity compensation is a headache in an LLC compared to that of a C-Corp. But I'm not sure how much money we really had to spend to do it.
I do not agree that having an LLC will meaningfully impact your funding. Obviously, nobody is going to fund an LLC. But you'll work out terms on the premise that you'll do a conversion or reincoporation/merger, and the legal for doing that will be part of your closing costs. Friends who have gotten funded under a C-Corp have told me they had to do this anyways, because VCs wanted the corporation on their paper anyways.
It's a little bit like saying that nobody will fund an actual sole proprietorship. That's true, they won't. But they'd prefer it if you came to them in that form! Because that's the cheapest corporate form to convert to their preferred form.