Re:Stripe opens its Atlas program to US-based startups
by zaroth on Friday April 07, 2017 @01:38PM
(#14061785)
The biggest problems I've seen for a startup going the LLCs route is negative tax consequences of reinvesting profits, and missing out on the first $10 million of Federal tax-free capital gains.
The fact that LLCs are indeed a 'swiss army knife' IMO also works against them. The LLC agreements tend to be bespoke documents which are far too "crafty" for my liking. I like straightforward cap tables with clearly defined rights and preferences and ISO options, whereas LLCs tend to reinvent the wheel and end up with opaque capital structures which require costly legal work to implement.
The fact that LLCs are indeed a 'swiss army knife' IMO also works against them. The LLC agreements tend to be bespoke documents which are far too "crafty" for my liking. I like straightforward cap tables with clearly defined rights and preferences and ISO options, whereas LLCs tend to reinvent the wheel and end up with opaque capital structures which require costly legal work to implement.