Entity formation, business banking, and cap table basics. The legal and financial infrastructure every startup needs before taking its first dollar — and the order to do it in.
The entity exists to put a wall between the business and your personal assets, and it only works from the day it exists forward. Revenue collected before formation, contracts signed in your own name, and IP written on a personal laptop all sit on your side of that wall. Most founders raising outside capital form a Delaware C-corp because investors expect it and the case law is settled; most founders who intend to stay bootstrapped and profitable form an LLC in their operating state because it is cheaper to run and taxed once. The wrong choice is recoverable. Waiting is the expensive part.
Open a business account the week the entity is registered and never pay a business expense from a personal card again. This is not bookkeeping hygiene — commingled funds are the single most common way a court decides the entity was never really separate from you, which undoes the protection you just paid to create. You will need the formation documents, your EIN, and usually an operating agreement. Get a business card on the same account so expenses categorise themselves, and keep the personal card out of the drawer entirely.
Founder shares are usually issued subject to vesting, and vesting is what makes the 83(b) election matter. Filing it tells the IRS to tax the shares at today's value — near zero — rather than at each vesting date, when the company may be worth considerably more and you may owe tax on stock you cannot sell. The window is thirty days from issuance and there is no extension, no cure, and no discretion. It is the one deadline on this page where missing it is permanent.
A cap table is just a record of who owns what and on what terms, and it is trivial while there are two founders and no investors. It stops being trivial the moment there is an advisor with a handshake, a contractor paid partly in equity, or a friend who put in money early on unclear terms. Every one of those becomes a diligence problem later, and they are almost always fixable now and expensive later. Record the numbers, the vesting schedule, and the option pool in one place from the first grant.
If the founders wrote the code, the company does not own it until an assignment says so. Every founder signs an IP assignment; every contractor signs one before work starts, not after delivery; anyone contributing meaningfully signs a confidentiality agreement. A founder agreement covering equity splits, vesting, roles, and what happens when someone leaves is worth writing while everyone is still friendly, because that is the only time it can be written fairly. Investors will ask for all of this, and the ones who do not are not the problem — the acquirer three years later is.
An entity creates recurring obligations regardless of whether it earns anything: a state annual report and franchise tax, a federal return, payroll registration once there is a first employee, and sales tax registration wherever nexus applies. None of it is difficult and all of it is easy to forget in year one, when there is no revenue and no accountant. A dissolved-for-non-filing entity is a genuinely bad surprise to discover during a financing. Put the dates in a calendar the day you form.
Work through entity choice, equity splits, and the filing calendar with operators who have done it, and with the experts in the Gravy network when a real filing is on the line.
This is general guidance, not legal or tax advice. Entity choice, equity structure, and the 83(b) election all have consequences specific to your situation. Consult an attorney and a CPA before you file.
Agent nudge: Work through the six steps in order and note which are already done. The 83(b) window is thirty days from issuance and cannot be extended — check that one first.