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Why is it that it's easier to raise capital for an S Corp than an LLC?

In this audio snippet, you'll hear about:

• The way ownership is expressed allows an investor better control of their investment

Travis: Now, why is it that it's easier to raise capital than an LLC?

Jake: It's just the way that ownership is expressed. You know. Stock is a very easy thing to issue. You're able to issue a certain number of shares. And, there's a par value that's assigned to each individual share, so you're able to raise capital very easily and seamlessly through a corporation. With an LLC you've got percentages and units, there's no real value that's assigned to it, and the laws are really set up to garner the transactions for an incorporation versus an LLC.

Travis: So, it's just structured better for that activity.

Jake: It is.

Travis: Well, that makes sense why a lot of venture capitalists and angel investors require a small business to have an S Corp versus an LLC.

Jake: Right.

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