10 October 2019

Jumping the Pond

The „Delaware Flip“ for German Tech Companies

Given the significant increase of ticket size and overall investment volume in German VC transactions, we observe that US VC investors become a more frequent sight even in early-stage financing rounds (e.g. Series A and B). However, given the volume of home-grown US companies seeking investment, US VC’s are inclined to invest in familiar corporate structures and many potential German portfolio companies are required to “flip” their corporate structure into a Delaware corporation. Against this background, its high time to take a closer look at the pro’s and con’s of the Delaware flip for German tech companies and how common mistakes can be avoided. If executed properly, a “Delaware Flip” can be a significant advantage for German start-ups looking to attract substantial funding from US VC’s and extend their business model into the US .

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