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Startup Mistake 2 of 13: Poor Choice of Entity

Choosing the wrong legal entity early can create avoidable tax and fundraising issues for emerging tech companies.

Choosing the wrong entity structure can create problems for emerging tech founders, especially if the company plans to raise outside capital, issue equity, or position itself for an exit.

In the video below, Matt Storms explains why many high-growth startups choose a C corp and what founders should consider before forming an LLC, making an S election, or choosing a structure that could complicate future financing.

If you have questions about any of these issues or want to discuss your specific situation, you can schedule time with our team here: 

Learn more about venture capital terms using our glossary: