Off-topic from the OP's question, but if you're incorporating as an S (for example, although other pass-through entities are similar), you need to pay yourself a "reasonable and appropriate" amount as salary. That is, you can't just pay yourself $1/year in salary and take $500K off in K-1 distributions (thereby avoiding FICA and other payroll-only withholdings). The IRS will tag you for that in a heartbeat.
I would also like to point out that most Angel Investors/VCs won't invest in LLCs/S-Corps. I think this is because of preferred options... I'm sure someone else with actual experience could chime in.
Heh, and most LLCs/S-Corps won't bother looking for Angel/VC investment. ;-)
That said, AFAIK converts (which seem to be getting popular these days, at least among sensible angels) are perfectly compatible with typical S corp structure.
My company just converted from an LLC to a C-Corp. The result was delicious sausage, but the making of said sausage is not something we'd repeat if given a choice.
