If so, for most startups, wouldn't the only disputes settled by the Court of Chancery largely be between the founders and the VC's, with the Court of Chancery historically siding with the VC's on the board?
Is this the biggest reason why VC's prefer Delaware before other states?
The framing of VCs / board versus founders / shareholders doesn't make sense to me because so many startups have founders controlling the board. And VCs are shareholders too, of course.
I think what you may be referring to is that the Delaware courts generally give the company management broad discretion over business decisions. So it's difficult for a random shareholder to successfully sue the company over some bad decision they made. But as a founder, that's what you want, so you can run your startup without having to worry about backseat drivers.
For the record, I'm not an activist, if that's what you're saying.
I just don't see that the benefits (which seem to be very hard for anyone to quantify) of being in Delaware even come close to comparing to the opportunity or actual costs of not being in a far more business- and tax-friendly state like Wyoming, Texas, or Florida.
This handbook actually contains a lengthy discussion of why startups choose to incorporate in Delaware: https://handbooks.clerky.com/startup-incorporation/where :)