I recently talked with a lawyer about setting up a C-Corp for my startup, since C-Corps are the traditional choice for high-growth tech startups. He insisted that I use the LLC structure instead. His argument was that LLCs lead to ~25% higher valuations than C-Corps, due to the following:
> Sale of Assets > Buyers of businesses prefer, if possible, to get a basis step up in the assets of the business being acquired. This is possible with an LLC and not possible with a C corporation without triggering a second layer of tax. This is probably the biggest complaint or concern with C corporations.
I had literally never heard this before. He further said this advantage is large enough to offset any other tax advantages for C-Corps (most notably the QSBS).
Question: Is this lawyer correct? If so, why don't more high growth tech startups use the LLC structure?