If you’re an investor who got in early on a promising startup, you may now find yourself in the dark—no updates, no financials, and no idea how your investment is performing. You’re not alone. Many minority stockholders face this exact challenge. Fortunately, if you invested in a Delaware corporation, Delaware law provides a tool to help you get answers: Section 220 of the Delaware General Corporation Law.

What Is Section 220?

Section 220 gives stockholders the right to inspect a corporation’s books and records—if they can show a “proper purpose.” This is a broad definition, and, for minority investors, proper purposes often include:

• Valuing your shares
• Investigating potential mismanagement
• Understanding major corporate decisions
• Preparing for litigation

Recent Changes in 2025: What You Need to Know

In March 2025, Delaware enacted Senate Bill 21, which significantly amended Section 220. These changes were designed to reduce burdens on corporations, but they also narrowed the scope of what minority stockholders can access, primarily by narrowing the definition of “Books and Records.”

Previously, courts interpreted “books and records” broadly, sometimes including emails and texts. Now, the statute limits inspection to formal documents, such as:

• Certificate of incorporation and bylaws
• Minutes of board and stockholder meetings (past 3 years)
• Financial statements (past 3 years)
• Contracts with stockholders (under DGCL 122(18))
• Materials provided to the board in connection with decisions

Unlike the prior iteration of DGCL 220, informal communications like emails or Slack messages are not required to be produced in response to an inspection demand unless the investor can prove that no formal records exist and/or meet a high evidentiary threshold.

How This Affects Minority Investors

As a minority investor, you may not have board representation or the right to receive regular updates (e.g., via a side letter or as a “Major Investor” under Section 3 of the NVCA Investors’ Rights Agreement). Section 220 is your legal pathway to transparency. But with the new limitations, you need to be strategic:

• Be specific: Don’t ask for “all documents.” Focus on board minutes, financials, and communications related to key decisions.
• Document your purpose: Explain why you need the records—e.g., to assess valuation or investigate dilution.
• Consult counsel: A lawyer can help craft a demand letter that meets the new statutory requirements and withstands scrutiny.

Final Thoughts

Delaware’s amendments to Section 220 reflect a balancing act between corporate efficiency and investor rights. While the path to inspection is narrower, it’s still viable—especially for minority investors who want to protect their early-stage investments.

If you’re unsure about the value of your shares or the direction of the company, don’t stay in the dark. Section 220 might be your flashlight.

To discuss any of the above, please contact Lachlan Huck or Zoë Maddox.

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If you’d like information about other matters Focal may be able to assist you with, please visit Focal’s website, www.focallaw.com, or email info@focallaw.com.