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Setting up a tech company is already a high-voltage roller-coaster—no need to add self-inflicted loops. Nail these five early-stage moves and you’ll spare yourself (and your investors) expensive clean-up work later.

1. Start as a C-Corporation—Not Later, Now

Venture investors assume you’re a Delaware C-Corp because it lets them hold preferred shares, grants you unlimited shareholders, and—crucially—keeps you eligible for the 100 % QSBS capital-gains exclusion (up to the greater of $10 million or 10× basis). Converting from an LLC or S-Corp after you raise is messy and may reset that QSBS clock.

2. Buy Your Founder Shares from the Company (for Pennies)

At incorporation, purchase your stock directly from the corporation—usually at $0.0001–$0.001 per share. That single invoice timestamps your holding period for QSBS and 83(b) purposes and proves you paid for the equity. Future diligence teams will thank you.

3. Put Founder Shares on a Vesting Schedule

Even if the founding team is just you and your best friend, impose vesting (standard: four years with a one-year cliff). Should a co-founder leave in month nine, the company can repurchase the unvested stock instead of lugging around dead weight on the cap table. Investors view this as non-negotiable.

4. File Your 83(b) Election—30-Day Shot Clock

The IRS gives you exactly 30 days from the stock-purchase date to file. Do it, and you’re taxed on today’s near-zero value; skip it, and you’ll owe ordinary income tax as each tranche vests at future (hopefully sky-high) prices. There are no mulligans.

5. Separate Business & Personal Money on Day One

Open a dedicated business bank account and run every company dollar through it—no Venmoing yourself for “random supplies.” If you cover expenses personally, record them as a short-term loan at a reasonable interest rate and pay it back when you close your first round. Clean books speed up fundraising and keep the IRS happy.

Quick-Glance Checklist

Up Next

We’re unpacking QSBS, 409A valuations, and early-stage tax hacks in depth during our Personal Finance for Startup Founders live session.

Subscribers get first dibs on the live session and the replay. 👀 

Stay tuned, and in the meantime, forward this checklist to the co-founder who still hasn’t opened the business checking account.

Building a company is hard but your paperwork shouldn’t be. 

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If you want more resources on building wealth as a solopreneur/entrepreneur, check these out:

• The Solo 401k handbook

• The Roth IRA handbook

• The Self-Directed IRA handbook

• The Guide to Paying Less in Taxes

• What is a Solo 401k?

• How to Open a Solo 401k