The issue is that we have a code base for the first company (Coding started about 6 years ago) that we want to develop into a different and much bigger product. The problem is much harder than our current startup, and we wanted to use the startup to help finance the bigger problem. We want to leave open the option of selling the startup and don't want to risk having to give up the legacy code and ideas which we think could be a dramatically bigger company. (The first company owns all that code). Once we develop the first ideas under the LLC further, we would have to convert it into a C Corp before going for investment. In the meantime, the LLC can own that code at low expense.
Well, you know more about your situtation than I do, so I'm not going to second-guess your strategy. But this does sound a little complex -- too complex for YC News to be much help. A $200 consultation with a lawyer might prevent a big headache later.
