Andreessen Horowitz, a prominent venture capital firm, announced its move from Delaware to Nevada for its main business, AH Capital Management. Concerns over Delaware court rulings bias against tech startups prompted this shift. The firm indicated that legal uncertainties have made entrepreneurs reconsider where to incorporate. Notably, several tech companies, such as Dropbox and Tesla, have already left Delaware. The firm believes that its public decision may encourage founders to explore incorporation outside Delaware without fearing investor backlash. Despite the move, it will continue funding Delaware-incorporated companies but sees Nevada as a viable option.
"In particular, Delaware courts can at times appear biased against technology startup founders and their boards," the firm said in a blog posted to its website.
"As a result, many of the companies we fund and the entrepreneurs that we talk to are taking a second look at whether they should incorporate in other jurisdictions, prompted by the departure from Delaware of significant technology companies like Dropbox, Tripadvisor and Tesla."
"For founders considering a similar move, there is often a reluctance to leave Delaware, based in part on concerns for how investors will react," the company said.
"As the largest VC firm in the country, we hope that our decision signals to our portfolio companies and prospective portfolio companies that such concerns may be overblown."
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