Why UK founders choose Delaware over their home market
London is one of Europe’s biggest tech hubs, with UK startups raising around $17 billion in venture funding in 2025. But a growing number of British founders are choosing to flip their corporate structure to the US, or set up there from day one. That usually means incorporating in Delaware.
While the UK offers strong early-stage tax incentives through SEIS and EIS, and those schemes were expanded in the 2025 Budget with EIS lifetime limits doubling from April 2026, scaling a company often demands access to deeper capital pools. For many founders, that means tapping directly into the American market. Read ahead to find out why so many businesses make this cross-border move.
Early practicalities of the move
Setting up a US entity is often the easiest step, but it triggers a chain of other tasks. Founders need to think about tax compliance, US bank accounts and local regulations early on. Transferring intellectual property from the old UK company to the new US parent takes time and careful legal work.
Physical relocation is another big milestone. Many founders assume their visa options are limited to the well-known H-1B route, but the reality is more nuanced. Running a profile through a tailored US visa assessment often surfaces routes that founders didn’t know existed, from O-1A visas for individuals with extraordinary ability to L-1 transfers for those with an existing overseas entity. The options are more flexible than many first assume, but planning needs to start well in advance.
The scale of US venture capital
The main driver behind this trend is the size of the American VC market. US venture capital funds manage around six times more capital than their EU equivalents, with a total fund size of roughly €930 billion compared to about €150 billion in the EU. In 2025, the US accounted for 57% of all global VC funding.
American investors are also deeply familiar with Delaware’s corporate law framework. The state’s Court of Chancery, a specialist business court staffed by expert judges rather than juries, has built up decades of case law that makes legal outcomes more predictable. That said, the landscape is shifting.
Delaware’s Senate Bill 21, signed into law in March 2025 and upheld by the state’s Supreme Court in early 2026, has sparked debate. Critics argue it tips the balance toward corporate insiders, while supporters see it as a necessary update to keep businesses incorporated in the state.
Removing friction for US investors
Many US venture capital firms strongly prefer not to invest in foreign entities. Their fund structures often aren’t designed for it, and US tax rules around passive foreign investment companies and controlled foreign corporations add cost and complexity. By setting up a Delaware C-Corporation, UK founders remove that friction entirely, letting them compete for American capital on level terms.
It’s worth noting that this barrier is strongest at the early stage. Later-stage US investors are increasingly willing to back non-US companies directly, so the pressure to flip is most acute for founders raising their first institutional rounds.
Higher valuations and exits
Valuation multiples in the US run significantly higher than in the UK and Europe. As of early 2025, software M&A exit multiples in the US were roughly 168% higher than in Europe. Fintech M&A valuations in the US were nearly 90% higher. For a founder weighing up where to base their company, that gap has a direct impact on dilution and eventual returns.
The US also offers more established exit routes. American IPO markets are far more active than London’s, where first-half 2025 fundraising hit its lowest point in at least 30 years. And on the acquisition side, US tech giants have been active buyers of UK companies, with deals like DoorDash’s £2.9 billion purchase of Deliveroo in 2025.
Access to executive talent
Building a global company requires leadership that’s done it before. The US has a deep pool of executives who’ve scaled businesses from early stage to billion-dollar valuations. Hiring them is easier when the business operates locally and uses a corporate structure they understand.
Key hires UK startups typically look for once they’re in the US include Chief Revenue Officers with enterprise sales experience, VP-level marketing leaders who understand American audiences, and Product Directors who’ve managed global software rollouts. Stock option plans under Delaware law are familiar to American workers, making compensation packages competitive from the start.
The smart move is still Delaware, the smarter move is planning it properly
The commercial case for Delaware is strong, but it’s not without trade-offs. A flip typically costs between $50,000 and $150,000 in legal and advisory fees. And it’s worth knowing that Delaware itself is facing a “DExit” trend, with some high-profile companies like Tesla and Dropbox reincorporating elsewhere over concerns about shareholder litigation rules.
London remains an excellent place to build a startup, and the UK’s early-stage funding environment is getting stronger. But for founders aiming at global scale, particularly those who need large amounts of US venture capital, Delaware continues to be the default choice. The key is making that decision with clear eyes, proper legal advice and a realistic timeline.