For foreign founders building a company with ambitions to raise capital from U.S. investors, the “Delaware flip” has become a familiar part of the startup playbook. The basic idea is straightforward: a founder initially incorporates a company in their home jurisdiction and later creates a Delaware corporation or holding company above the existing business. The Delaware entity becomes the parent, while the original foreign company typically becomes a subsidiary.

Private equity-backed companies operate within a distinctive governance environment. Unlike the directors of many publicly traded companies, directors of private equity portfolio companies often work closely with a controlling investor that has a defined investment thesis, a finite investment horizon, and ambitious expectations for growth, operational improvement, and eventual exit.