It’s a game I have to play every time I see a Forbes or Inc. list, regional VC stats or The Fortune Ledger: Which of these Delaware companies are actually Delaware companies?
As you no doubt know, well over a million companies have incorporated in Delaware (a quarter million incorporated here in 2020 alone). They include Facebook, Tesla and Coca-Cola.
DuPont, Gore, CSC — those are Delaware companies.
We also have lots of entrepreneurs. Too many to list. Some of the companies that started out as startups include Marlette Funding, Carvertise and Prelude Therapeutics. We have up-and-coming entrepreneurs in all kinds of industries, from green tech to apparel to career development.
So when I saw that three Delaware entrepreneurs had made the Forbes Next 1000 list honoring “upstart entrepreneurs redefining the American dream,” I was disappointed to find that none of them were Delaware-based entrepreneurs.
The confusion happens because every company that is incorporated in Delaware — all 1.6 million of them — must have a Delaware address, which is usually attached to a registered agent. That address is mandatory and is used primarily for mailing legal documents. It’s not intended to represent a physical address.
Usually, it isn’t. Coca-Cola may be incorporated in Delaware, but they’re very much a Georgia company with an Atlanta headquarters.
But sometimes, usually with smaller, up-and-coming companies, the Delaware incorporation address — often just a mailbox — shows up as the company’s physical address. I can usually recognize them by sight at this point. This is something I have to check, because my job is to cover startups and businesses based in Delaware, and if I also covered companies that are only incorporated here, the actual local companies would get buried.
Plus, it just wouldn’t make sense. Technical.ly covers communities — the people who are here in Delaware.
Forbes, Fortune and Inc. don’t have any incentive to check to see if the “Delaware” companies they list are actually Delaware-based companies. The majority of the people who look at these lists have no idea that the companies are not located in Delaware, and most probably wouldn’t care one way or another.
But three out of three not being in Delaware on a list that is specifically searchable by state? It’s kind of an issue.
It’s hard for Delaware companies, especially the small ones, to make national lists like this. It’s a major achievement when they do. But, for example, Keystone Funding won’t get its proper recognition as the highest-ranking Delaware company on the Inc. 5000 at #407, because it’s ranked behind three “Delaware” companies that are actually based outside of the state.
To be sure, it’s an annoyance and not a crisis, and I don’t know a solution — beyond letting our Technical.ly community know that you can still nominate yourself for Forbes Next 1000.
Let’s get some Delaware-based entrepreneurs on the list.