SUB CATEGORIES OF Form

In Silicon Valley, most technology companies are Delaware corporations and we recommend that technology companies that desire to raise venture funding be formed as Delaware corporations. There are many reasons for such a choice. First, corporations (particularly Delaware corporations) are familiar to startup lawyers, investors and other constituents. We cannot understate this point. Many lawyers and investors do not understand the nuances of pass-through entities. A technology company should have different technology, a defensible market position and superior management. Differentiation in choice of entity is not a selling proposition. Second, venture funds that take investment from pension funds or subject to ERISA are often restricted from investing in pass-through entities such as limited liability companies and limited partnerships. If a startup wants venture funding, it should be structured to make it easy to accept venture investment. The corporation is the only structure that makes it easy to accept venture investment. Third, corporations are inexpensive to form, inexpensive to maintain year to year and inexpensive to dissolve.