Votes and ownership can come apart
A share usually represents two things at once: a financial claim on a company and a vote on certain corporate decisions. In a dual-class structure, the company separates those rights. One class may carry one vote per share, while another carries more—sometimes ten votes for every vote attached to an ordinary share.
That difference lets a founder raise money by selling ordinary shares without surrendering the same proportion of decision-making power. Investors still share in the company’s gains and losses according to the shares they own; the founder’s extra votes do not automatically mean extra profits.
Control without majority ownership
Voting rights matter most when shareholders choose directors or weigh in on major corporate actions. If the founder’s high-vote shares supply enough votes, the founder can influence those outcomes even when outside investors collectively own most of the company’s economic value. The key measure is therefore not just who owns the most shares, but how many votes each share carries.
The arrangement is a tradeoff. Supporters see a way for founders to pursue long-term plans without being pushed toward short-term decisions by changing investor sentiment. The cost is weaker leverage for ordinary shareholders: they may bear much of the financial risk while having limited ability to replace leadership or redirect the company. A share purchase can therefore provide a stake in a business without providing an equal voice in its governance.
