Why Does One Tiny State Set the Rules for Everyone? (Update)

Hey there, it's Stephen Dubner. For the past century, one small state, Delaware, has led the nation as the place where new businesses go to incorporate. Roughly two-thirds of Fortune 500 companies are registered in Delaware. We thought this was worth looking into, so a couple years ago we published an episode called Why Does One Tiny State Set the Rules for Everyone? But recently, Delaware seems to be losing its grip.

In 2024, a Delaware court invalidated a $56 billion compensation package for Tesla CEO Elon Musk, so he relocated Tesla's legal incorporation to Texas, along with another of his companies, SpaceX. And several other big firms have recently left Delaware, including Dropbox, TripAdvisor, And most recently, Andreessen Horowitz, the biggest venture capital firm in the world. Three Andreessen Horowitz executives just published a post titled, We Are Leaving Delaware and We Think You Should Consider Leaving Too. Given this growing exodus, we thought you might like to hear our original episode.

So here it is, as a bonus episode. Stated facts and figures where necessary. As always, thanks for listening. Walk me through your attraction to the Delaware story. When did that begin and how?

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