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A SAFE (Simple Agreement for Future Equity) is a fundraising instrument created by Y Combinator that gives investors the right to receive equity in a future priced round. Unlike convertible notes, SAFEs have no maturity date, no interest rate, and are not debt. They convert into preferred stock when a qualifying financing event occurs, based on a valuation cap and/or discount rate specified in the SAFE.

If you plan to raise venture capital, a Delaware C-Corp is the standard structure. VCs and institutional investors require it for tax, governance, and structural reasons. LLCs work well for bootstrapped businesses where pass-through taxation is beneficial and outside investment is not planned. Converting from LLC to C-Corp later is possible but adds cost and complexity—it is usually better to start with the right structure.

There is no universal formula. Equity splits should reflect each founder's contribution, role going forward, risk taken, and the value they bring. More importantly, all founder equity should be subject to vesting—typically a 4-year schedule with a 1-year cliff. This protects the company and remaining founders if someone departs early. Document the arrangement in a written founders' agreement.

Not automatically. Under US copyright law, independent contractors generally retain ownership of the work they create unless there is a written IP assignment agreement. This is one of the most common and costly mistakes startups make. Every contractor—and every employee—should sign an IP assignment agreement before beginning work. Fixing IP ownership gaps during due diligence is expensive and can delay or derail fundraising.

At minimum: a properly formed Delaware C-Corp with clean corporate records, an accurate cap table tracking all SAFEs and equity grants, signed IP assignment agreements from all founders and contributors, founder vesting agreements, and basic corporate documents including bylaws and initial board consents. Investors conduct due diligence, and gaps in these areas cause delays, reduce negotiating leverage, or raise red flags.