[danskil]

Be warned, though, that neither alternative is generally appealing to investors.

So what kind of corporate entity would be appealing to investor?

[kgrin]

C corp; it's just that getting there from the questioner's LLC may be expensive/cumbersome

[spolsky]

We're going through this right now ("converting" an LLC to a C-Corp to make VCs happy).

It's not hard, not expensive, and not cumbersome. We're creating a new C Corp, and making the old LLC a subsidiary of the C Corp. It's common and standard and it's about 5% of the paperwork that lawyers do to close a Series A round. It's basically the easiest part of our financing.

Don't worry about starting your company as an LLC. If you don't take VC, you'll be MUCH happier with an LLC than a C Corp, because it avoids double taxation in many scenarios.

The best of both worlds is to start as an LLC and only convert to a C Corp when and if you take Series A financing, in which case you'll be doing so much paperwork the conversion will be the least of your worries.

[staunch]

What is hard or expensive about converting an LLC to a C corp? Assuming two 50/50 partners in a simple California LLC.