From Swedish AB to Delaware C-corp

Abstract

This thesis investigates why Swedish tech startups choose to pursue a Delaware flip, and how this decision influences their access to U.S. venture capital networks, mentorship, and signaling effects. Despite the growing prevalence of Delaware incorporation among venture-backed startups, empirical research focusing specifically on Swedish founders remains limited. The study adopts a qualitative research design based on semi-structured interviews with 16 respondents across four groups: founders, investors, intermediaries, and innovation support actors. Empirical data was collected in both Sweden and San Francisco, enabling cross-contextual comparison. The findings show that the Delaware flip is primarily driven by institutional pressure rather than active strategic choice, even though startups benefit from the decision as they expect to grow globally, it functions as an entry requirement to the U.S. venture capital ecosystem rather than an independent value creator. Capital availability, higher valuations, and risk appetite in the U.S. further reinforce the decision. However, the flip introduces significant trade-offs including legal complexity, dual compliance burdens, and potential friction with European customers. The standalone signaling value of Delaware incorporation is found to be limited, with stronger signals stemming from affiliations with reputable investors and accelerators such as Y Combinator. The thesis contributes a Swedish empirical perspective to existing literature and offers practical implications through a decision-support tool for founders evaluating a Delaware flip.