More votes, more control, and more questions.
EXPERT OPINION BY KEN STERLING, EXECUTIVE VICE PRESIDENT, BIGSPEAK @MEDIALAWWOLF
Founders love control. I understand why. A founder starts with the idea. The founder takes the risk. The, the founder works the nights, raises the money, builds the team, carries the stress, and often gives the company its soul.
So, when founders ask for super-voting shares — or founder control rights, board control, veto rights
Mark Zuckerberg’s super-voting shares are legendary in the tech business, and if you watched The Social Network, you probably have heard of them.
Super-shares, often called dual-class or multi-class stock,
Super-shares, often called dual-class or multi-class stock, are shares — typically held by founders or key insiders — that carry enhanced voting power. In plain English, one class of shares may receive one vote per share, while a founder may receive ten or more votes per share — or some other enhanced voting right.
Refreshed leadership advice from CEO Stephanie Mehta
An Inc.com Featured Presentation
As a Century City attorney focused on the intersection of law, media, and technology, I’ve worked on dozens of funding deals and have advised my share of founders. Here’s what I tell them and the investors about super-shares.
Advice for founders
If you’re a founder who wants investor capital while also keeping near-total control, you need to bring something special to the table. I’m talking about Elon Musk, Mark Zuckerberg, or Sergey Brin type of something special. You need a track record of success, a unique product, or a compelling long-term vision. Without that something special, super shares look less like vision protection and more like accountability avoidance.
On the plus side for founders, super shares give you increased voting rights to have strategic control, insulation from short-term market pressures, defense against hostile takeovers, and protection of your company culture and mission.
Source: www.inc.com
