What is the need for voting rights if the founders have ~68.3% majority?
According to the general information, the company has two classes of shares which will be allocated in a definite way. 45% of Class A shares are being offered for sale. 24% are held by the board as Class B shares. Other 31% are reserved for a future employee incentives pool, finance, bonuses, compensation and etc. Both classes have identical economic benefits and what is more, the holders of our Class A common stock and Class B common stock will generally vote together as a single class.
If you meant something else, please specify, how you calculated 68%.
According to the announcement there are 845118 class A shares and 266882 class B shares. Class A shares have 1 vote per share while class B shares have 10 votes per share. Therefore the total number of votes are 1 x 845118 + 10 x 266882 = 3513938, of which 10 x 266882/3513938 = 75.95% is the class B voting percentage. I made a mistake in my previous calculation.
So in actual fact the number of shares being offered for sale (500000) only have a 14.23% vote.
I just cannot see the reason for the different classes as the 500000 shares on sale have such small say in the company. In fact the class A shares which represent ~76% of the total number of shares have a combined ~24% (including the allocation to treasury, rewards, payments for services and employees participation) say in the direction of the company.
It just feels like there is no use in giving the class A shares any voting rights and it seems like a "token" gesture.
Class A shares will own 45% of the company and will have all rights and privileges of common shares. It is not a gesture. There are several reasons for the founders shares having 10x1 voting and the Class A 1x1 vote.
1.In case of one or two investors buying the entire ICO offer, they could take over the management and control, which the founders are not prepared to do at this time.
2. The founders do not necessarily all will vote as one block. For instance, if in three years there is an offer to buy the company at 500 euros per share and half the founders do not agree, then the 45% Class A together with the half that agree could accept the offer. The same with any other time where a shareholders vote is required and the class B shareholders vote is split.
3. Class B shares cannot be sold or transferred. Only held by the Founder who owns them. If the Founder wishes to sell or give them, they are automatically converted to Class A. If the Company is sold, as in the above example, then there would only be non voting shares.
4. Non-voting shares are less valuable. If in the future there is a new round of financing, the new investors may require the issuance of a new class of voting shares. This new class would be more valuable than Class A shares. If subsequently the Company is sold, the new buyers may not be interested in any of the Class A shares.
5. The two largest investors with over 56 000 Class A shares, will each have the right to a Board seat. This gives considerable power in the affairs of the company and allows them to contribute towards the growth and success of the business.
The founders together with the ICO investors have all equal rights apart from voting rights. If the company declares a dividend or is acquired, both classes A and B will receive the same amount.
Hopefully, this clarifies the offering share structure.
