In most cases, I'd advise initially starting out as a Limited Liability Company of the state in which you reside. The main reason for this is that you (and your contributors) can get tax write-offs for investing in your startup. Also, it's much cheaper and easier to set up than a corporation, and provides a great deal of legal protection for your co-founders. There's really no reason to bother with an S-Corp, since an LLC essentially has all of the benefits and far less drawbacks.
However, most VCs won't fund an LLC for a number of legal reasons. If your LLC is planning to pitch to VCs, I'd recommend incorporating (into a C-corporation) before doing so. Sure, it will cost you a few thousand dollars in legal fees and paper work, but I don't know of any VCs that don't require incorporation first.
Also, I'd recommend incorporating in Delaware, since Delaware law is extremely forgiving to new startups. There's a reason why so many businesses are registered in that state...although, many startups have been incorporating in California recently as well.
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In most cases, I'd advise initially starting out as a Limited Liability Company of the state in which you reside. The main reason for this is that you (and your contributors) can get tax write-offs for investing in your startup. Also, it's much cheaper and easier to set up than a corporation, and provides a great deal of legal protection for your co-founders. There's really no reason to bother with an S-Corp, since an LLC essentially has all of the benefits and far less drawbacks.
However, most VCs won't fund an LLC for a number of legal reasons. If your LLC is planning to pitch to VCs, I'd recommend incorporating (into a C-corporation) before doing so. Sure, it will cost you a few thousand dollars in legal fees and paper work, but I don't know of any VCs that don't require incorporation first.
Also, I'd recommend incorporating in Delaware, since Delaware law is extremely forgiving to new startups. There's a reason why so many businesses are registered in that state...although, many startups have been incorporating in California recently as well.