Why they originally picked Stripe Atlas
They were a YC application reject in 2024 and had read the YC startup playbook recommending Delaware C-Corp. Stripe Atlas was the easiest path. $500 setup, polished onboarding, Stripe credits included. They formed in month 0 of business.
Why they switched in month 14
Bootstrapped to $80K ARR over the first 14 months. Realized:
- No priced equity raise planned (Delaware C-Corp benefit not realized)
- Paying $400/year in Delaware franchise tax + registered agent (no value)
- C-Corp double taxation on retained earnings (not pass-through)
- QSBS treatment irrelevant if you do not sell
So they researched alternatives. Wyoming LLC saved $300+/year recurring and gave pass-through tax treatment.
The conversion process
- Week 1: Form Wyoming LLC via WyomingLLC ($297 + state fee)
- Week 1-2: EIN for new Wyoming LLC (8-10 business days)
- Week 2: Open new Mercury account for Wyoming LLC
- Week 3: Transfer Stripe US to Wyoming LLC (Stripe supports business entity changes)
- Week 3: Notify customers via email about entity name change (most did not notice)
- Week 4: Dissolve Delaware C-Corp at Delaware SoS (file Certificate of Dissolution)
- Week 4-5: Final Delaware tax filings and account closures
The savings
- Delaware year 2-5 saved: $400 × 4 = $1,600
- Wyoming year 2-5 cost: $160 × 4 = $640
- Net 4-year savings: $960
- Stripe Atlas $500 setup vs Wyoming $397: $103 less upfront
- Total 5-year savings: ~$1,500
What surprised them
- The conversion was easier than expected (4 weeks total)
- Customers did not notice the entity change (Stripe handled it transparently)
- Tax structure became simpler (pass-through vs C-Corp filings)
- No customer support call from Stripe Atlas trying to retain them
Would they recommend the switch?
Yes for similarly bootstrapped non-VC-track founders. The Delaware C-Corp structure has real value for VC-track companies. For everyone else, Wyoming pass-through wins.