Regarding the fear of being seen as small. This is probably a common fear and it's certainly something I felt at the beginning. Our initial documentation referred to "we" when it was really "I." However, it's good to get over this and embrace your true size. It gives people a chance to be impressed with you.
For example when we launched we were competing directly with Ning which had an ultra famous founder, 40+ million in funding and a two year head start. During an interview with TechCrunch, the reviewer said, "Oh, you're a one-man Ning."
That sounds a lot better than, "you're a third-rate Ning." We've since gone off into a vertical where we can actually be the leader but we're still upfront about size. People give a us a lot more leeway and respect for it.
Also, when will people see your incorporation status? The only time people see ours is when we bill them for services. There's no way to hide your size then. It's not like you can present a bunch of fake personas. So your size is going to come out in other ways and when it does you don't want to look like a faker.
Put it this way: if every employee will receive 1099 distributions instead of a W2 paycheck, or if no W2 employee will formally be given equity to begin with, you're better off with an LLC.
If not, you were right to go for an S-Corp. It's just paperwork, and you're not going to screw yourself over with it. We're converting right now without a huge amount of legal pain.
For example when we launched we were competing directly with Ning which had an ultra famous founder, 40+ million in funding and a two year head start. During an interview with TechCrunch, the reviewer said, "Oh, you're a one-man Ning."
That sounds a lot better than, "you're a third-rate Ning." We've since gone off into a vertical where we can actually be the leader but we're still upfront about size. People give a us a lot more leeway and respect for it.
Also, when will people see your incorporation status? The only time people see ours is when we bill them for services. There's no way to hide your size then. It's not like you can present a bunch of fake personas. So your size is going to come out in other ways and when it does you don't want to look like a faker.