The cost in California isn't a problem and this is where I will be setting up our LLC, but I don't want to set it up until I am ready to start bringing in revenue. Don't want to have to start paying the annual tax of $800 until we are finished devloping years down the road. Until than I'm setting up a Sole Proprietorship thus I have our company name copyrighted and are officially set up as a business and not just a team(investors would trust a business more) :D

Investors (other than Friends and Family) will require and LLC or C-Corp so that you can issue them equity in the form of shares or an ownership interest in the company in exchange for caseh. Otherwise you will be taking on a debt for which you could be personally liable to repay.

I've read up on this quite a bit, here are a few steps you will need to take to achieve your goals:

1. Come up with a name for your company and make sure it has not already been taken. (sadly I can't seem to remember where you do that...)

2. Register and build your website, I personally use host monster and have been very satisfied. I did a lot of research and host monster was one of the top rated sites for customer satisfaction and is one of the least expensive hosting services out there. Building the site will probably take a bit longer then you expect though...

3. Register your company. (You probably want a limited liability company.)

4. Advertise your games, make a blog, post YouTube videos, forums, Google ads and do anything else you can think of to get your games noticed.

If you have the money it maybe a good idea to hire a lawyers to do the legal stuff though it will probably be quite costly...