In order to qualify as QSBS, the corporation has to be a C-Corp on the investment date, but not before.
If the business was formed as a different legal structure (e.g. LLC, S Corporation, Partnership), the company can terminate its legal structure to re-incorporate as a C-Corp before the issuance/sale of the stock.
Converting a legal entity raises various complications. For example, if an entity is converting from an S-Corp to a C-Corp, it is not as simple as transferring stock for stock in the new entity as stock-for-stock transfers do not qualify for QSBS. It may be possible for the owners of the S-Corp to transfer the assets of the S-Corp to a C-Corp in exchange for QSBS under a tax-free exchange pursuant to IRC Section 351(a). If the stock received from the C-Corp qualifies as QSBS, the owners of the S-Corp will realize the QSBS tax exclusion through their S-Corp K-1.
This article does not constitute legal or tax advice. Please consult with your legal or tax advisor with respect to your particular circumstance.