In The News

Moving Time

Asian Venture Capital Journal

05 Sep 2017

It’s becoming common for startup founders to seek super-voting rights over their companies, as they reach Series B or C financing, in an effort to control the voting shares. According to Morrison & Foerster partner Thomas T.H. Chou, this practice may face resistance by investors, but only if other stakeholders are seeking more voting control in the process.

“In the absence of a new financing event, existing investors would typically resist amending the existing governance agreements to provide for such a change in voting control. However, if the new investors agree that the founder-CEO will have super-voting rights, the new investors likely will  want to ensure that existing investors do not end up with greater voting control per share than they have,” he said in the Asian Venture Capital Journal article “Moving Time.” “This means that the implementation of super-voting for the founder-CEO often ends up applying to all series of preferred shares, rather than against only the newest series of shares to be issued.”

Read the full article (subscription required). 



Unsolicited e-mails and information sent to Morrison & Foerster will not be considered confidential, may be disclosed to others pursuant to our Privacy Policy, may not receive a response, and do not create an attorney-client relationship with Morrison & Foerster. If you are not already a client of Morrison & Foerster, do not include any confidential information in this message. Also, please note that our attorneys do not seek to practice law in any jurisdiction in which they are not properly authorized to do so.