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> That's not a flaw, it's a fundamental part of how it is meant to work. Is it? Up until recently this was not the typical result. Google did this and others h

by dpark 8y ago

> That's not a flaw, it's a fundamental part of how it is meant to work. Is it? Up until recently this was not the typical result. Google did this and others have followed, but it’s not how it was done before then.

mkirklions 8y ago
Typically the founder of a company owns the company. So unless you want to buy the founder out, the founder still has ownership. Sure the moment it goes public, you need to ask the question 'who leads?', but you will have to buy out the owenership.
- jartelt 8y ago
  Yes, founders always have ownership, but it is not always the case for the founders to own more than 50% of the company after a few financing rounds. Startups that do super well can pull this off, but I think it is safe to assume most normal startups do have super majority voting schemes that give founders total control of the company.
- dpark 8y ago
  That's not what's being discussed at all. There is no question of ownership, but of voting rights. e.g., Brin and Page own something like 14% of Google stock combined, but control >50% of the votes. That's the exact setup that Domo is attempting, giving its CEO >90% of votes by virtue of getting 40 votes per share.
- wpietri 8y ago
  This is not typical at all for tech startups. If you take investment, the founder's share declines quickly: https://www.lawtrades.com/blog/answers/usual-share-percentage-seed-round/ https://www.lawtrades.com/blog/answers/usual-share-percentag... Even a single founder can be under 50% by the end of the series A, as you not only have two rounds of investors, but you have to carve out a chunk of equity for employees (10-15%). And if you have multiple founders, which is typical, no one founder may own more than 50% past the seed round.
  - mkirklions 8y ago
    Eh, you were trying really really hard. I think you knew what I meant. Or your head is in the clouds.
aetherson 8y ago
It wasn't even that much the case with Google, where remember the board/investors installed "adult supervision" for like a decade. Facebook, on the other hand, was always Mark's. He has had ironclad control of the company from inception to the present day. And when Facebook became the success story of its generation of companies, investors took the lesson that you always had to have the founder(s) have complete control of the company. That led to the modern trend of founder worship, which probably lasted more-or-less until Travis Kalanick, Elizabeth Holmes, and Parker Conrad swung the pendulum in the other direction.

by dpark 8y ago

mkirklions 8y ago

Typically the founder of a company owns the company. So unless you want to buy the founder out, the founder still has ownership. Sure the moment it goes public, you need to ask the question 'who leads?', but you will have to buy out the owenership.

jartelt 8y ago
Yes, founders always have ownership, but it is not always the case for the founders to own more than 50% of the company after a few financing rounds. Startups that do super well can pull this off, but I think it is safe to assume most normal startups do have super majority voting schemes that give founders total control of the company.
dpark 8y ago
That's not what's being discussed at all. There is no question of ownership, but of voting rights. e.g., Brin and Page own something like 14% of Google stock combined, but control >50% of the votes. That's the exact setup that Domo is attempting, giving its CEO >90% of votes by virtue of getting 40 votes per share.
wpietri 8y ago
This is not typical at all for tech startups. If you take investment, the founder's share declines quickly: https://www.lawtrades.com/blog/answers/usual-share-percentage-seed-round/ https://www.lawtrades.com/blog/answers/usual-share-percentag... Even a single founder can be under 50% by the end of the series A, as you not only have two rounds of investors, but you have to carve out a chunk of equity for employees (10-15%). And if you have multiple founders, which is typical, no one founder may own more than 50% past the seed round.
- mkirklions 8y ago
  Eh, you were trying really really hard. I think you knew what I meant. Or your head is in the clouds.

aetherson 8y ago

It wasn't even that much the case with Google, where remember the board/investors installed "adult supervision" for like a decade. Facebook, on the other hand, was always Mark's. He has had ironclad control of the company from inception to the present day. And when Facebook became the success story of its generation of companies, investors took the lesson that you always had to have the founder(s) have complete control of the company. That led to the modern trend of founder worship, which probably lasted more-or-less until Travis Kalanick, Elizabeth Holmes, and Parker Conrad swung the pendulum in the other direction.