My answer to Why did Mark Zuckerberg incorporate Facebook as a Florida LLC?
Answer by Raad Ahmed:
The other answers are correct, the other founder Eduardo Saverin’s family was in Miami at the time the company incorporated. Saverin did invest 15K in the business early on, so that may have also been why it was based more on the state he felt more comfortable with. It’s also true that the company eventually transitioned to being incorporated in Delaware due to issues between the two founders. There’s a lot of back and forth about the root cause of the problem was, but eventually it became apparent that the incorporation would be best made elsewhere—and most business people are aware that Delaware is an incredibly attractive state for incorporating.
I think this situation teaches us a couple of things—you shouldn’t make huge business decisions (such as where to incorporate) based on basic things like where a founder’s family lives and two, sometimes it’s best to make changes when things simply aren’t working out.
I guess if the founders of Facebook had a learning curve, all startups should take comfort in the trial and error phase of business development.
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