"It created a simple registration system, stripped away corporate bureaucracy, and invited the nation's companies to call it home. Hoping to attract steam engines and gunpowder manufacturers, Delaware's leaders could scarcely have imagined that, a century later, the 'Delaware Inc' model would serve as the foundation for smartphones, search engines and electric cars. In other words, it would become the corporate vehicle that underpinned the world's most valuable and transformative businesses."
"The numbers tell a sobering story, as MIT's principal research scientist Andrew McAfee has pointed out. Publicly traded companies started from scratch in Europe in the past 50 years are collectively valued at around $420 billion, while their U.S. counterparts approach $30 trillion - almost 70 times as much. All six U.S. companies with a market cap over $1 trillion have been set up in the past half century; not a single EU equivalent has."
"This chasm exposes the fragmentation that's holding back European innovation. A startup with a Delaware Inc. can raise capital and expand from coast to coast across the US without breaking its stride. Investors know the structure. Deals and hiring happen fast, and the company's momentum compounds. Meanwhile, a founder scaling across Europe must incorporate separate entities in each country, untangle regulatory and employment codes in multiple languages and markets, and explain to engineers in Munich why their stock options are treated different"
Delaware rewrote corporate law in 1913 to attract companies by creating a simple registration system, reducing corporate bureaucracy and centralizing corporate rules. The 'Delaware Inc' model later became the legal foundation for many of the world's most valuable technology and industrial firms. Europe has produced notable global companies but lags the U.S. in the value of publicly traded firms founded from scratch over the past 50 years—about $420 billion versus roughly $30 trillion in the U.S. Fragmented national rules force European founders to create multiple entities, navigate diverse regulations and reconcile different stock-option treatments. A unified, corporate-friendly framework could lower scaling barriers and accelerate European global champions.
Read at Fortune
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