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you're right on the disclosure issue and cost issue - but I've always been more concerned with voting rights, which a strange interloper would certainly have.
by joshjkim 11y ago
you're right on the disclosure issue and cost issue - but I've always been more concerned with voting rights, which a strange interloper would certainly have. Especially in the context of M&A, the risk of a rogue common shareholder can be significant. I don't think it's a show stopper, but it is an issue.
- scurvy 11y agoMost founder series preferred shares have voting multipliers built-in. The fear of an interloper led takeover based on voting rights is another myth.
- joshjkim 11y agohm, but i don't think most founders have founder series preferred. It was getting more popular for a few years but the trend seems to have died down - if you have evidence to the contrary, I'd be curious to see. Mine's anecdotal but not bad: last 20 cap tables with at least 5 you would recognize as "hot" companies, I didnt see one.
- scurvy 11y agoI haven't looked for a few years now. Most of my current data is hearsay. Interesting to see that the trend swung the other way. Thanks!
- manigandham 11y agoMost founders these days get common shares, not preferred.
- mahyarm 11y agoOften your shares come with proxy voting agreements that go to the CEO / Founder. So the employee stock pool becomes the founder voting pool, until IPO.