Why your startup should be a Delaware C-Corp, not an LLC
Sure, he&#x27;s correct -- if and only if make a lot of assumptions.<p>But he is talking about startups, and there, from all I can see and without his many assumptions, a Delaware C-Corp is a lot more time, lawyer money, other overhead, and botheration than just an LLC.<p>Sure if I have co-founders, which YC seems to want but I don&#x27;t, or Sequoia wants to write me an equity check for $20 million, which, by the time they would, I wouldn&#x27;t need, want, or accept it, I&#x27;d want a Delaware C-Corp.<p>But, IIRC, with a C-Corp, I have to have a BoD that I have to keep happy, or they can and very well may fire me -- take my company.  So, a Delaware C-Corp has me take a lot of the power I have as CEO and 100% owner of my startup and hand a lot of that power, control, and financial value to a BoD for no good, and many really bad, reasons.  &quot;Financial value&quot;?  Sure, the BoD could fire my ass, put in one of their buddies as CEO, and the BoD and their buddy could issue nice stock options to the members of the board.  Due to vesting, etc., I could leave with nothing, not even $0.00.  They could flatly just steal my company from me including all the value, cash, intellectual property, promise, everything -- 100%.<p>There&#x27;s nothing seriously wrong with, and a lot of important advantages to, being CEO and 100% owner of a successful LLC startup.  Or, all across the US there are pizza shops, flower shops, auto body shops, dentists, etc. that don&#x27;t have a BoD.  My startup has a lot more financial promise than an auto body shop, but I don&#x27;t want a BoD either.<p>E.g., with a BoD, have to have board meetings.  Then the members of the board have to travel to the meeting.  So, guess where the money comes from for their travel (first class air, limo service?), lodging (four star hotel?),  fancy dinners?  No thanks.<p>I learned early on that I&#x27;m not always good at pleasing people, even if I do really good work.  E.g., my Ph.D. is in applied math, and I did the research independently with no faculty direction or input, picked the problem before I went to grad school, and did the core research in six weeks alone in the library in my first summer.  I gave a graduate seminar on my work, designed and wrote the illustrative software, wrote and typed the dissertation, stood for my oral exam (majority of the faculty from outside my department, Chair, Member, US National Academy of Engineering, from outside my department, majority people I&#x27;d never met), passed, first time, without revision, from a world famous, world class research university, and got my Ph.D.<p>BUT:  In the eighth grade, the arithmetic teacher gave me a D (as is common for boys of that age, my handwriting was awful and so was my clerical accuracy) and fervently advised and urged me never again to take anymore math.  Right, honey:  I didn&#x27;t take freshman calculus, taught it to myself, started on sophomore calculus in a course using the same text Harvard did, found the course easy, and made an A.  In my high school, all the female teachers (gossips?) were all conviced I was a poor student and a poor math student, but the only male math teacher I had sent me to a state math tournament, my aptitude and achievement tests showed that I was one of the best math students in the school, an especially good high school, I got sent to an NSF summer math program, and on the school&#x27;s SAT math scores, of 1-2-3, I was #2.  #1 went to Purdue.  #3 went to MIT.  In college I wrote on group representations and got Honors in math.  My math GRE score was 800.  Then I was sent to another NSF program, in axiomatic set theory and modern analysis.  But my high school female math teachers thought I was a poor math student.  I was a very good math student, but there  was no way I could please those females.<p>Being good is not enough.  Instead, people can get totally pissed at you for no good reason, even if you walk on water in warm weather.<p>A BoD might just hate my guts.  E.g., if I presented some original math derivations, with advanced prerequisites, for a step forward for part of the business, say, as part of getting the budget approved, the BoD might soil their clothes, the board room furniture, and the carpet on the way to the rest rooms and come to deeply, profoundly, bitterly hate and despise me, all for no good reason.<p>If have something rare and good, don&#x27;t dilute it with a lot of mediocre nonsense.  If are lucky enough to have Michelangelo painting the ceiling, don&#x27;t send in a lot of house painters to give him advice.  Or, when Stravinsky wrote <i>Right of Spring</i>, some Tin Pan Alley guy wanted to recommend a good <i>arranger</i> for Stravinsky&#x27;s music.   For such nonsense, just say not only &quot;no&quot; but, if they insist, &quot;hell no&quot;.<p>Reporting to a BoD has a big downside, a huge risk for no good reason, and nearly no significant upside.  E.g., there is a good chance that not one BoD member of an information technology startup anywhere in the world has even the math prerequisites to understand the crucial, core math I derived for my startup; not understanding the math, they will not be able to do their jobs and will hate me.  So, no way do I want to put my career and startup in the hands of a BoD that hates me.