US Fundraising 101

Raising in the US can get slower, pricier and way more stressful than it needs to be. So it’s time to map out the most founder-friendly route with SeedLegals CEO Anthony Rose. 

Learn how to set up the right structure, use investor tax incentives to make your funding round more attractive, and understand the hidden rules that can quietly change your dilution, taxes and investor appeal. 

Want to avoid the VC ‘come back later’ trap? Check out the recording below. 

Key takeaways

Keep fundraising friction-free with the right US company structure

• LLCs might be useful in the earlier stages as pass-through losses can offset your personal income tax – but they’re not investor-friendly because they don’t operate like share-based companies.
   
• If you’re planning to raise soon, it’s usually simpler and cheaper to incorporate as a C-Corp from day one – especially if you want to issue SAFEs or other equity-like instruments.
   
• For state choice, the practical advice is: go Delaware. Most investors and lawyers expect it and the legal framework is well understood, reducing friction and resultant investor drop-off. 

Use US tax incentives as a real fundraising advantage

• QSBS (Qualified Small Business Stock) can make your startup dramatically more attractive: hold stock long enough, and investors (and founders) may pay no federal capital gains tax up to a certain limit.
• Most early-stage startups qualify for QSBS unless they’re in certain excluded sectors, and the qualification generally holds until you hit a higher asset threshold.
• Section 1244 loss relief is the underused ‘downside protection’ story. If the company fails, eligible investors can potentially write off losses against income tax (not just capital gains), up to an annual cap.

SAFEs are fast – but you should understand the hidden trade-offs

• SAFEs removed the huge legal overhead of priced rounds, which is why they dominate early-stage US fundraising – but they also create uncertainty and rights gaps for investors.
• There’s a real gray area around QSBS timing with SAFEs: does the ‘clock’ start when the SAFE is signed, or only when it converts into shares? The lack of a clear ruling means investors may take different stances.
• Pre-money SAFEs behave differently –  the key point is to track dilution like a hawk and don’t treat SAFEs as valuation-free fundraising.

You need an instantly understandable pitch 

• If your deck/website leads with “AI + blockchain revolutionising X,” you’re forcing investors to do work. Lead with the painful problem followed by who it’s for, and then explain the tech.
• Build everything around a clear and real user archetype and use visuals that make the product obvious at a glance.
• Tools (eg. vibe-coding) can help you iterate quickly, but the product may look cheap if the site looks too templated. Polish acts as a credibility marker.
• Content is marketing, but it’s also something that helps you clarify your message and build authority.
  

Fundraising is really about targeting and gaining momentum

• If you’re pre-product or pre-revenue, most VCs will say ‘come back later’ – this could be because you’re too early for their fund economics or because they don’t understand your story well enough to take the risk.
• Avoid sending your deck too early – if they ghost you, you won’t know why. A call lets you tailor the pitch to what that specific investor cares about.
• Valuation needs to match the market: too low signals unnecessary dilution and too high can lead investors to assume something’s off. Use common patterns and treat valuation as a negotiation starting point, not a vanity metric.