A "Delaware Flip" involves the incorporation of a new US corporation in Delaware followed by the exchange by all the shareholders in the existing UK company of their shares for an equal number of shares of stock in the Delaware entity. This is achieved using a share exchange agreement. The purpose of inserting the new Delaware holding company into the structure is usually to attract US investors or to meet a condition of US investment. It may also be desirable to flip if the UK company expects their employees, market or operations to be primarily in the US in the future. It is a common requirement for UK companies that get accepted to US-based accelerator programmes, such as Y Combinator.
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