Do we need to incorporate before launching a fundraising round?

You may have a difficult time raising money by offering what would effectively be partnership equity.

Looking for a "low cost" way to properly incorporate and transact securities is like looking for "low cost" surgery. Your path forward will depend on your business goals, your current capitalization, where you are located, and the amount of money you are looking to raise, among other things; all very proprietary items worthy of discussion with an attorney in private.