"Don't incorporate, though, if you can avoid it. We're less likely to accept groups that are already incorporated, because it costs so much more to deal with existing documents than to start from scratch." http://ycombinator.com/faq.html
This faq is certainly a reason for making this post and asking, as our release would come before the winter session starts and maybe before Oct. 11th, when application results come out.
Is seems the consensus is to incorporate in some fashion just out of basic prudence before a release. So the question for PG and folks at YC is "you'd rather we no incorporate, but I think we need to, how should we do it?"
Another thread mentioned opening the "standard" papers YC uses -- and PG mentioned the problem in papers that might be wrong or have holes for companies. I'd like to hear about any progress on that front.
But make sure you do it as a Delaware Class C Corporation, because otherwise YC will want you to convert and that's much more expensive than than doing it from a scratch. So don't incorporate as an LLC from your state, even if it might be cheaper.