What state should I incorporate in?
Almost all our startups are incorporated in Delaware. The standard for startups is to incorporate in Delaware for a few reasons:
- The corporate laws in DE are generally more company favorable.
- The case law in Delaware is much more developed and, therefore, if an issue comes up it is easier for the company to do an analysis of the potential outcome.
- Investors and VCs and their attorneys are more familiar and comfortable with DE corporations. This is what the players in the startup sector are accustomed to seeing. Familiarity is a great thing to make things much more efficient when an financing or acquisition is trying to close as soon as possible.
- To do an IPO, a corporation will almost always be reincorporated in DE due to the beneficial corporate laws.