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A comment on Why your startup should be a Delaware C-Corp, not an LLC. Parent comment

Re:Why your startup should be a Delaware C-Corp, not an LLC by uiri on Wednesday March 15, 2017 @10:18PM (#13881847)
It seems like it would qualify under the rules of an Other Nontaxable Exchange - Property Exchanged for Stock.[0] I think there are enough cases like this and the IRS rules are sufficiently clear that it will be possible to structure the VC investment in a way that eliminates any tax liability on the conversion.

[0] https://www.irs.gov/publications/p544/ch01.html#en_US_2016_p...

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