What a flip actually is
Shareholders in your existing company exchange their shares for shares in a newly formed Delaware corporation. Your original company becomes a subsidiary. The cap table, the IP and the operating business all end up in the right places for a US round.
Why investors ask for it
US venture documents assume a Delaware C-corp. Funds have mandates, tax positions and standard paper that do not travel well to a foreign entity. The flip removes a reason to say no.
What moves and what stays
Equity moves up to the new parent. Employees, contracts and often the IP stay where they are, at least at first. Deciding what to migrate and when is most of the work.
Why timing decides the cost
A flip done while the business is worth very little is usually straightforward. The same flip after real value has accrued can create a taxable event for your shareholders in their home country.
The questions that decide your answer
When to flip, and when not to
What it costs
Flips and US expansion structures
from $8,900
Questions founders ask
How long does a flip take?
Typically two to four weeks depending on how many shareholders you have and how many countries they sit in. The legal drafting is rarely the slow part. Getting signatures and local tax confirmations is.
Will this create a tax bill for my shareholders?
It can, and it depends on their individual jurisdictions rather than on yours. We structure the exchange and work with local advisers in each country involved. Anyone who tells you the answer without asking where your shareholders live is guessing.
Can we keep operating through the original company?
Usually yes, and often you should. The subsidiary continues to employ people and run the business while the Delaware parent holds the equity and takes the investment.
Does a flip affect QSBS?
It affects when your holding period starts and whether your shares count as originally issued, so yes, materially. Raise it before the flip is designed rather than after.
Do you work with founders outside the US?
Constantly. A large share of our work is founders in Europe and elsewhere setting up in the US properly the first time.
