The March Out of Delaware

One looks at the corporate landscape and sees a lot of movement out of the State of Delaware. Funny, but Delaware, for over a century, was the “go-to” state whe a company was exploring incorporation, and later, LLC options.

 

But no more.

Andreessen Horowitz, one of the world's most influential venture capital firms, announced it will move its corporate headquarters from Delaware to Nevada.

The investment giant is the latest corporation to join a Delaware exodus that began after a state court voided Tesla CEO Elon Musk's $55 billion pay package in response to a 2018 lawsuit filed by a shareholder who thought the amount was excessive. Musk also moved SpaceX to Texas.

The pro-woke state must have blinders on because the exodus to leave is gathering more steam with each passing day. It seems, on the surface, that the state politicians and judges are on board, as the state continues to lose these businesses and the lucrative tax dollars they had been willing to pay.

Once the state is forced to make up the shortfall by passing the loss onto its voting public, there will be hell to pay. The free ride will be over.

"It used to be a no-brainer: start a company, incorporate in Delaware. That is no longer the case due to recent actions by the Court of Chancery, which have injected an unprecedented level of subjectivity into judicial decisions, undermining the court's reputation for unbiased expertise," Andreessen Horowitz said Wednesday in a news update on its website.

“We have therefore decided to move the state of incorporation of our primary business, AH Capital Management, from Delaware to Nevada, which has historically been a business-friendly state with fair and balanced regulatory policies," the company said.

Known in Silicon Valley as A16Z, Andreessen Horowitz boasts about $45 billion in assets, with notable investments including Facebook, Airbnb, Coinbase, and Lyft, according to Leave Delaware.

Other major companies to leave Delaware recently include the nation's largest mall owner Simon Property Group, Bill Ackman's Pershing Square Capital Management, online retailer Mercado Libre, Roblox, Tripadvisor, Affirm, AMC cable networks, Madison Square Garden, and Dropbox, among others.

Also in May, President Donald Trump's media company joined the exodus from Delaware, fleeing the left-leaning Blue State for the more "pro-business" climate of Florida.

And the exodus continues.