There are many ways to have influence. A few, for example - They can limit the company's ability to raise future funds - They can convert equity to debt if it

There are many ways to have influence. A few, for example - They can limit the company's ability to raise future funds - They can convert equity to debt if it's convertible. If the company can't pay back the debt they can gain more control - They can have rights to control hiring and firing - They may have voting rights with the equity - They have a voice with the public, press, customers, hiring candidates - They have rights as minority shareholders - Various clawback and other provisions may raise or lower their equity stakes, giving them more or less control - They have access to information they wouldn't have otherwise Besides contractual and legal rights, they have relationships with management. Presumably they can just talk to management and influence them that way. Also, power can also be used to act in concert with the company, which is augmented by their inside information and made more credible by their shared interest. They can - Recommend candidates for hiring - Recommend clients - Inform about competition - Advise - Reinvest - Recommend other investors Etc etc