Our ongoing Corporate Governance Insight series about the DExodus (or DExit) (previous installments include an overview from our Corporate Governance Insight on March 20, 2025 and an update on June 11, 2025) now includes an update for companies to consider, regarding a recent announcement by AH Capital Management, L.L.C. ("Andreesen"), the largest venture capital firm by assets under management.
Andreesen published a blog post on July 9, 2025, entitled "We're Leaving Delaware, And We Think You Should Consider Leaving Too." As the title states, Andreesen announced they are moving the state of incorporation of their primary business from Delaware to Nevada. The announcement notes that Dropbox, Tripadvisor, and Tesla have also left Delaware.
While we recommend reading the post in full, we have summarized Andreesen's key views and reasoning below. (Note that the below is a summary of the opinion of Andreesen and does not reflect the opinion or advice of Nelson Mullins Riley & Scarborough, LLP.)
Andreesen's announcement lists the following reasons it is choosing to move to Nevada:
- Nevada's Business Judgment Rule is Statutory-Based. Andreesen expresses its preference for Nevada's statutory-based business judgment rule (providing a presumption of good faith and informed decision-making to company fiduciaries) to the approach in Delaware based on case law, pointing to a 2021 Nevada Supreme Court ruling that the Nevada statutory standard exclusively governs director and officer liability rather than a subjective "entire fairness" doctrine.
- Nevada Protections From Individual Liability for Officers and Directors. Andreesen highlights Nevada's statute which excludes monetary damages resulting from any act or failure to act as an officer or director unless a plaintiff (i) rebuts a presumption that the officer or director acted in a good faith and informed manner and (ii) proves the act or failure to act is a breach of a fiduciary duty involving intentional misconduct, fraud or a knowing violation of law. Andreesen notes that Delaware limits damages subject to judicial doctrines. Andreesen also points to the Grundfest study, which we discussed in our June 11 blog post, that analyzes the damages against defendants in Delaware.
- Nevada Stockholder Inspection Rights Limited to 15% or greater stockholders. Andreesen notes that it prefers the bright line 15% rule in Nevada as compared to Delaware law, which permits any record stockholder to inspect "books and records" for any "proper" purpose related to the stockholder's interest if the request is brought in good faith. Andreesen acknowledges that Delaware's legislature recently took steps to clarify the "books and records" definition (see our Corporate Insight from February 25, 2025 summarizing this effort), but views those changes as inadequate.
- Nevada Business Court expertise. Andreesen asserts that Nevada has taken steps to appoint business court judges to resolve complex commercial disputes, rather than relying on juries. Andreesen points to a recent proposed amendment to the state's constitution that, if passed, would allow the Nevada Governor to appoint to the bench judges with the appropriate legal and business experience.
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