Delaware vs Wyoming for tech startup in 2024 - is Wyoming actually better now?

I publish illustrative scenarios prepared by my practice. The participants and conversations are fictional. These are not posts by real users, accounts of client experiences or reports of actual results.
Started by mike_t_13 · May 16, 2024 · 0 replies
For informational purposes only. Not legal advice.
MT
mike_t_13 OP

Sorry for the wall of text. Getting ready to incorporate my B2B SaaS. I'm based in Colorado, no plans to raise VC (bootstrapping), probably 1-3 employees eventually.

Everyone says "just do Delaware" but I keep seeing Wyoming mentioned. Lower fees, more privacy, no franchise tax. Is Wyoming actually viable in 2024 or is Delaware still the default?

CA
cant_afford_a_lawyer_2

Real talk: this is exactly right. The #1 mistake I see: solo consultants in California forming Delaware LLCs because a YouTube video told them to. They end up paying Delaware fees + California foreign LLC fees + California franchise tax โ€” more expensive than just forming in California imo.

Simple rule: form in Delaware if you're raising institutional capital. Form in your home state for everything else. Wyoming is a good choice only if you actually operate there or need the specific privacy/asset protection features and don't have a home-state nexus.