Startups

Denver has emerged as one of the nation's most vibrant startup ecosystems, attracting founders, investors, and talent from across the country. Whether you are building a technology company in RiNo, a consumer brand in LoDo, or a cleantech venture in Boulder, the tax and financial decisions you make in your company's earliest stages can have lasting consequences -- for better or worse. Lanphier LLP works with startups throughout the Denver-Boulder corridor and across Colorado to help founders get the financial foundation right from day one.

Too many startups treat accounting and tax as afterthoughts -- something to worry about once revenue starts flowing. By that point, critical decisions have already been made (often poorly) about entity structure, equity issuance, contractor classification, and tax election timing. Unwinding these decisions is expensive and sometimes impossible. Lanphier LLP helps founders avoid these pitfalls by providing strategic guidance at the inception stage, when the right decisions cost very little but the wrong ones can cost a great deal.

Entity Formation and Early-Stage Tax Strategy

The choice between a C-Corp, S-Corp, LLC, or other entity structure is one of the most consequential decisions a startup founder will make. The answer depends on the company's fundraising plans, the founders' personal tax situations, the state in which the company operates, and the company's long-term exit strategy. We help founders analyze these variables and select the entity structure that best aligns with their goals. For companies that plan to raise institutional capital, we advise on C-Corp best practices including 83(b) elections, qualified small business stock (QSBS) treatment, and the structuring of SAFEs and convertible notes.

R&D Tax Credits and Investor Compliance

The federal R&D tax credit is one of the most valuable incentives available to startups, particularly those investing in software development, engineering, or scientific research. For pre-revenue and early-revenue companies, the credit can even be applied against payroll taxes, providing real cash savings at a time when every dollar matters. We help our startup clients identify qualifying R&D activities, document their expenditures in a manner that will withstand IRS scrutiny, and claim the credit on their returns. We also assist with the investor compliance requirements that come with raising capital -- ensuring that all securities filings, tax elections, and investor K-1s are handled correctly and on time.

Equity Compensation

Stock options, restricted stock, and other forms of equity compensation are central to the startup model, but they introduce significant tax complexity for both the company and its employees. We advise startups on the design and tax treatment of option plans, the importance and timing of 409A valuations, the tax consequences of exercise events, and the planning opportunities available to employees who receive equity compensation. For founders, we coordinate equity compensation planning with their broader personal tax strategy to ensure optimal outcomes.