Andreessen Horowitz Leaves Delaware for Nevada, Tells Startups to Follow(bloomberg.com)
bloomberg.com
Andreessen Horowitz Leaves Delaware for Nevada, Tells Startups to Follow
https://www.bloomberg.com/news/articles/2025-07-09/andreessen-horowitz-leaves-delaware-for-nevada-tells-startups-to-follow
24 comments
Blog post: https://a16z.com/were-leaving-delaware-and-we-think-you-shou... (https://news.ycombinator.com/item?id=44514205}
Nevada is the new Delaware it seems. Not surprising due to recent Deleware court decisions.
Businesses can deal with anything but uncertainty.
Businesses can deal with anything but uncertainty.
It's as close to a network state as they can get right now I suppose.
what decisions?
I'm not an expert. I believe it's because Delaware nurtured a reputation for being predictable and safe, but its recent behavior has caused worries that it is becoming erratic and activist.
A good writeup here:
https://news.law.fordham.edu/jcfl/2025/03/31/delawares-corpo...
Relevant clip:
>One of the main reasons for the recent corporate departures is likely the series of high-profile rulings by the Delaware courts that seem to run counter to established Delaware precedent. The Chancery Court has increasingly delivered rulings that expand corporate liability, intensify shareholder scrutiny, and impose heightened governance expectations.
A good writeup here:
https://news.law.fordham.edu/jcfl/2025/03/31/delawares-corpo...
Relevant clip:
>One of the main reasons for the recent corporate departures is likely the series of high-profile rulings by the Delaware courts that seem to run counter to established Delaware precedent. The Chancery Court has increasingly delivered rulings that expand corporate liability, intensify shareholder scrutiny, and impose heightened governance expectations.
Elon’s ridiculous pay package is the best known.
Founder owned companies want to enjoy total control, shareholders be damned. They consider the Delaware chancery court to be full of activist judges.
Founder owned companies want to enjoy total control, shareholders be damned. They consider the Delaware chancery court to be full of activist judges.
You mean the pay package that was approved by shareholders not once, but twice? The pay package people said "the goals are so ridiculous, Elon deserves every penny if he hits them"?
But regardless, it's about predictability. If it's not predictable, business goes elsewhere. If a state wants to be unpredictable, have at it, but businesses aren't going to stick around.
But regardless, it's about predictability. If it's not predictable, business goes elsewhere. If a state wants to be unpredictable, have at it, but businesses aren't going to stick around.
Tesla shareholders approved the pay package both at the time it was instituted and after the judge's decision. What evidence do you have that Tesla is ignoring shareholders? Shareholders approved the plan twice.
Shareholders have sued Tesla for:
- Insider trading on the part of Elon relating to the sale of $8B of stock.
- Dilution of the shareholders via excessive compensation due to a board substantially lacking independence.
- Conflicts of interest on the part of CEO damaging the company, magnified by the lack of an independent, functional board.
- Various deceptions relating to “Full Self Driving”
- Various other stock manipulation frauds.
There’s obviously controversy about the company and this issue. The Silicon Valley types have so much money now, and their investors have shifted to different sources, the corporate governance stuff is a problem for them. The characterization of Delaware chancery courts as “activist” highlights that.
- Insider trading on the part of Elon relating to the sale of $8B of stock.
- Dilution of the shareholders via excessive compensation due to a board substantially lacking independence.
- Conflicts of interest on the part of CEO damaging the company, magnified by the lack of an independent, functional board.
- Various deceptions relating to “Full Self Driving”
- Various other stock manipulation frauds.
There’s obviously controversy about the company and this issue. The Silicon Valley types have so much money now, and their investors have shifted to different sources, the corporate governance stuff is a problem for them. The characterization of Delaware chancery courts as “activist” highlights that.
Elon's pay package was very unusual. He would be paid a salary of zero. He would only receive compensation if he drove his company to ridiculously high growth, and only if he sustained that over a number of years. This package was agreed by shareholders (all of which have been massively enriched by Tesla). Few believed Elon could hit these targets.
Elon surprised everyone when he achieved ALL the ridiculously high targets.
Even more surprisingly, and somewhat disturbingly, a judge then decided to nullify his shareholder-agreed package, such that he would receive ZERO compensation for growing a penny stock startup into the world's most valuable automaker.
Obviously, Tesla disputed this ruling, and held another shareholder vote on Elon's original package. The shareholders once again voted for Elon to be given what he was promised by the company.
The judge again disregarded the opinions of the shareholders.
This happened in Biden's home state.
It's no wonder that Tesla reincorporated elsewhere, is it?
Elon surprised everyone when he achieved ALL the ridiculously high targets.
Even more surprisingly, and somewhat disturbingly, a judge then decided to nullify his shareholder-agreed package, such that he would receive ZERO compensation for growing a penny stock startup into the world's most valuable automaker.
Obviously, Tesla disputed this ruling, and held another shareholder vote on Elon's original package. The shareholders once again voted for Elon to be given what he was promised by the company.
The judge again disregarded the opinions of the shareholders.
This happened in Biden's home state.
It's no wonder that Tesla reincorporated elsewhere, is it?
Courts interpret the law, they don’t provide affirmation for decisions. The company reincorporated to a state whose laws with respect to corporate governance are engineered to meet the needs of resource extraction industries which have long dominated it.
The former president has no bearing whatsoever.
The former president has no bearing whatsoever.
You're still spouting the same talking points used when this was more fresh. They didn't hold up then and they don't hold up now. You can try to drag Biden into this I guess but it doesn't help your point.
Could you help me out by explaining which of my points are factually incorrect?
The point of Delaware was that it's corpus of laws favored the Board and "protecting shareholder investments." Thus, Delaware has prohibitions on undisclosed self-dealing and other shenanigans.
The point of Texas and Nevada is that the laws favor the C-suite and expressly disfavor external shareholders. They have no restrictions on unethical behavior; it's why billionaire tech bros love them so much.
The point of Texas and Nevada is that the laws favor the C-suite and expressly disfavor external shareholders. They have no restrictions on unethical behavior; it's why billionaire tech bros love them so much.
Presumably VCs would then disfavor investing in companies incorporated outside Delaware?
Stopped listening to A16Z advice a long time ago. They are part of the problem, not the solution
Same. Not interested in technofeudal apologists for unreasonable people who believe "empathy is the problem".
In the spirit of that other HN post about brevity in writing:
Who?
Who?
A16Z is a very well-known venture capital firm, due to its founders, who were involved in Netscape and Loudcloud. They put a lot of late-stage money into a variety of ‘startups’, with wide-ranging results.
georgemcbay(1)
https://www.businessinsider.com/marc-andreessen-trump-and-cl...
> Marc Andreessen on why he's supporting Clinton over Trump: 'Is that a serious question?'
> "The idea of cutting off the flow of immigrants into Silicon Valley makes me sick to my stomach," Andreessen says.
https://www.nbcnewyork.com/news/business/money-report/andree...
> Andreessen Horowitz founders plan to donate to pro-Trump super PAC
I suppose once you get an appetite for fascism your stomach aches go away.
> Marc Andreessen on why he's supporting Clinton over Trump: 'Is that a serious question?'
> "The idea of cutting off the flow of immigrants into Silicon Valley makes me sick to my stomach," Andreessen says.
https://www.nbcnewyork.com/news/business/money-report/andree...
> Andreessen Horowitz founders plan to donate to pro-Trump super PAC
I suppose once you get an appetite for fascism your stomach aches go away.
Folks.
It’s time.
TO BUILD.
It’s time.
TO BUILD.