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The smiling founders.

Who really controls a tech company once it goes public

Member exclusive by Youyou Zhou for The tech IPO boom

Typically, an investor’s power over a company is proportional to the the amount of money they’ve invested: The more shares you own, the more votes you have to vote for members of the board or on governance proposals.

Large private companies pumped full of venture capital investment with sky-high valuations aren’t typical (as their moniker “unicorn” suggests). For example, Lyft founders Logan Green and John Zimmer own just 5% of their company’s shares but have 49% of the voting power. The company, which went public on March 29, accomplished this by creating a special class of stock reserved for the two founders. It comes with 20 votes per share. The regular class of stock that public investors can readily buy has one vote per share.

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