Is a Delaware C-Corp or LLC better for a startup?

For startups planning to raise venture capital, a Delaware C-Corp is almost always the better choice.

VCs strongly prefer C-Corps because they can issue multiple classes of stock (common and preferred), which is essential for investment rounds. LLCs use membership interests instead of stock, creating complications with standard VC documents like SAFEs and priced rounds. C-Corps also allow 83(b) elections on restricted stock, which can save founders significant taxes. However, if you are a solo founder with no plans to raise VC funding, an LLC offers simpler taxation (pass-through) and less administrative overhead. LLCs avoid double taxation and do not require annual meetings or board resolutions. Lovie's formation wizard recommends the right entity type based on your funding plans and tax situation.