Earlier quoted context omitted.
Our actual product is different than our original idea when we formed the LLC although it uses technology from the original. What do you think of the idea of forming a C corp for the new application that is then owned initially by the LLC? (Our idea is to have core technology provided by the original LLC to a series of applications)
These multi-company organizations are almost always a bad plan. And even if they weren't, all investors think they are, so this sort of thing is a big red flag.
This is impolitic, but if you were starting a new venture and Arc were ready to be used in production, would you want to put it into the new company and, if not, how would you handle investors? This is a little more than hypothetical since you are using Arc in Ycombinator business, but it seems like a different situation than when forming a company with investors you barely know.