Control Stock

Here's a pitch you can't turn down. Someone starts a company. They say that they'll have 15 shares of the stock for sale. They'll keep five of the shares, and anyone else who wants to buy into their next great idea can purchase the other ten shares. So five new people purchase the other ten shares.

But there's a catch. The five shares the owner has are A-Shares of company stock, and the ten shares owned by the other five people are B-shares of the stock.

A-Shares get three votes each during company meetings.

B-Shares receive two votes during the meeting.

So the owner now has 50% of the company's assets, but 60% of the voting rights. And the other five people have 50% of the company assets, but 40% of the voting rights.

The A-Shares are an example of control stock, which provides a certain class of investor greater influence in the company than others. The structure is commonly done to ensure that CEOs and founders maintain influence over their companies.

This trend has been popular among technology companies. Facebook and Google both have different classes of stock that ensure their founders maintain totalitarian control of the company...while throwing a few bucks down to the pleb shareholders now and then.