Vercel

For pre-seed and seed checks under roughly 3 million US dollars total, the YC post-money SAFE is the dominant instrument because it defers valuation negotiations and avoids the legal cost of issuing preferred stock. Once the round exceeds 3 million US dollars or sophisticated lead investors come in, a priced Series A with full preferred-stock terms (liquidation preference, anti-dilution, pro rata, board seat) is standard. SAFEs convert at the priced round, usually at the better of the cap or a discount, so founders should track total SAFE dilution carefully - stacking too many SAFEs can produce a surprisingly large conversion at the Series A.

Wyoming has lower fees and stronger privacy for LLCs, but every institutional VC writing a Series A check requires a Delaware C-Corp. The Delaware Court of Chancery has more than a century of preferred-stock case law, the General Corporation Law explicitly permits the share-class structures investors expect, and the QSBS (Section 1202) federal tax exclusion requires a domestic C-Corp - which Delaware is the default for. A Wyoming entity would have to redomicile to Delaware before the Series A anyway, which costs legal fees and triggers a board reset. Just start in Delaware.

Permissive licenses like MIT, Apache 2.0, and BSD impose minimal corporate-structure requirements - the company simply needs to ensure all contributors assign or license their work appropriately, usually through a Contributor License Agreement (CLA) or a Developer Certificate of Origin (DCO). Copyleft licenses like AGPL or GPL are more constraining and can affect SaaS commercialization strategies, which is why open-core dev-tool companies typically dual-license: AGPL for the OSS edition, a commercial license for paying customers. The Delaware C-Corp owns the trademark, the CLA-assigned copyrights, and the proprietary code; the OSS license governs distribution of the public version.

Four-year vesting with a one-year cliff is the universal standard - 25 percent of founder shares vest on the first anniversary of incorporation or hire date, then the remaining 75 percent vest monthly over the next 36 months. Acceleration on change of control is typically double-trigger (acquisition plus involuntary termination within 12 months) rather than single-trigger. Founders should always file an 83(b) election within 30 days of receiving restricted stock, electing to pay tax on the (negligible) value at issuance rather than on each vesting tranche - missing the 30-day window can cost millions in eventual ordinary-income tax.