Super voting shares are a separate class of ordinary shares that have multiple votes per share. Ordinary shares usually have just one vote per share.
Founders are often worried about losing control of the company if they grant shares or options to acquire shares to team members and investors in the future. Founders sometimes consider granting themselves super voting shares, often carrying the right to up to 10 votes per share. As the founders’ shares carry significantly more voting power than other shares, they can retain control over shareholder decisions when new shareholders come on board.
However, investors often don’t like founders to have super voting shares.
If your founders have super voting shares, it might be difficult to secure investment from VCs or institutional investors when it comes to fundraising. The risk is that investors might think the founders have kept disproportionate control for themselves, which is not justified if they are not running a successful business. In this situation, many investors will view super voting shares as not being in the best interests of the company.
As a result, investors might require super voting share arrangements to be unwound when the first round of VC financing comes in, as a condition of the investment.
Investors may agree to founders having super-voting shares at a later date when the startup becomes more successful and the founders have proved themselves , for example in advance of an IPO.