re: So a C corporation is taxed twice on profit?

You shouldn't have to worry about income taxes until the business begins to generate profits. And if the initial capital is in the form of notes with warrants allowing conversion to equity, then you shouldn't have to worry too much about taxes or paying dividends to the investors. You will be paying them interest which is deductible which reduces the corporation's income subject to tax. And you shouldn't have to worry about dividends since the corporation will most likely be pouring all after tax earnings into expansion of the business operations.

So, I wouldn't worry too much about the taxes on dividends. I'd focus on making sure you get plenty of stock options as compensation while the business is expanding, and hopefully getting ready for an IPO. That is where the big payoff comes for the key players.