Converting LLC to C-corp for fundraising — timing and costs?

Running a Texas LLC for 2 years now, around $30K MRR. Got interest from an angel who wants to put in $150K but says I need to be a Delaware C-corp first.

How much should I expect this to cost and how long does it take? Want to know if we can close before year end.

did this last year. legal fees were around $4K with a small firm, took about 3 weeks from start to finish. the lawyer handled everything but you'll need to get a CPA involved too for the tax stuff

Process is called "statutory conversion" in most states. Texas allows it. Basic steps:

1. Form new Delaware C-corp
2. Adopt corporate documents (bylaws, stock agreements)
3. File conversion documents in both states
4. Exchange your LLC membership interest for stock
5. Dissolve or merge the LLC

Costs vary widely. DIY services like Stripe Atlas say they do it for ~$500 but that's misleading - doesn't include the tax advice you need. Most founders I work with pay $3-8K all-in depending on complexity.

Timeline: 2-4 weeks if everyone's responsive. Year-end is doable if you start now.

big warning: don't skip the tax planning. LLC-to-corp conversion can trigger a taxable event if done wrong. if your LLC has appreciated assets or retained earnings you could owe taxes on the conversion itself

@TaxWatcher oh wow didn't know that. What kind of CPA should I look for? General one or someone specialized?

Look for someone who does startup tax work. Most general CPAs don't deal with entity conversions often enough. The key thing to discuss is whether you can do a "F reorg" (tax-free conversion under IRC 351) or if your specific situation complicates it.

fwiw as an angel I'll often cover or reimburse conversion costs as part of the deal. ask your investor - $4K is nothing on a $150K check and it removes a barrier

one more thing - once you're a C-corp you can do 83(b) elections if you issue restricted stock to cofounders or early employees. wasn't possible as an LLC. small silver lining of the conversion hassle

Update: asked the angel about covering costs and she said yes. Found a startup-focused attorney, starting next week. Thanks all!