Tech giants are redrawing the boundary between capital and power.
As Anthropic publicly files for an initial public offering (IPO), a growing number of technology companies are using special share structures to sell equity to outside investors while keeping firm control in the hands of founders.
Anthropic's seven founders will collectively hold 50.1% of shareholder voting power; SpaceX, which listed in June this year, saw Musk retain roughly 82.4% of voting power after its IPO; and Meta Platforms, Inc. (NASDAQ: META) CEO Zuckerberg controls 60.6% of the company's voting power with only about 13.4% of its economic interest.
These arrangements mean that even if tech companies absorb enormous outside capital through listing, ordinary shareholders may not obtain decision-making rights proportional to their shareholdings.
Ownership of a company can keep dispersing, but the power to determine its future direction may remain highly concentrated in the hands of a few founders.
Listing can dilute equity, but control must stay with founders
On October 26, Anthropic's prospectus disclosed a special arrangement: before the IPO is completed, the company will issue one Class F share to an entity jointly held by its seven founders.
This single share carries no economic rights such as dividends, yet it holds 50.1% of the company's ordinary shareholder voting power, including the power to elect some directors.
No matter how many ordinary shares are issued after listing, as long as this special arrangement remains effective, outside shareholders as a whole cannot outvote the founders.
Anthropic has also established a long-term public benefit trust, whose independent trustees elect and remove a majority of the board through another class of special stock.
Under this governance structure, the founders and the public benefit trust jointly control the right to elect all board seats, and ordinary investors' influence over board composition is clearly limited.
A similar control arrangement also appears at SpaceX.
When it listed in June this year, SpaceX adopted a dual-class structure in which ordinary Class A shares carry one vote each, while the Class B shares held by Musk carry ten votes each.
In addition, Class B holders also have special rights to elect a majority of the board.
Through this structure, Musk still retained about 82.4% of voting power after the company went public.
Meta Platforms, Inc. (NASDAQ: META) is further expanding the use of this model.
The company's board recently approved the creation of Class C shares with no voting rights, allowing the company to raise funds, pay employee compensation and conduct acquisitions in the future by issuing new shares, while avoiding dilution of existing shareholders' voting rights.
This arrangement is especially important for Zuckerberg.
As of October 1, he held only about 13.4% of Meta's economic interest, yet controlled 60.6% of voting power through high-voting shares.
The new share class will allow him to sell part of his economic interest without simultaneously giving up corresponding control.
California's planned vote on November 3 on a billionaire wealth tax proposal has also become one of the factors driving Meta's equity structure adjustment.
Zuckerberg previously assessed that if he needed to sell shares to pay taxes, his voting power could fall from 60.6% to about 53%.
Although that would still be enough to maintain majority control, the new share arrangement gives him more room to cash out his stake in the future while preserving control.
Founders hold decision-making power, ordinary shareholders bear investment risk
For tech companies, concentrated control helps founders stick to long-term strategies and reduces interference from outside investors over short-term performance.
But for ordinary shareholders, it also means they can bear the costs of corporate expansion and investment losses, yet find it very difficult to force management to change direction through voting.
Meta Platforms, Inc. (NASDAQ: META) shows the returns this governance structure can bring.
Since listing at $38 per share in 2012, the company's stock price has risen more than 1500% cumulatively.
During this period, Zuckerberg has always held control of the company.
Even when the huge investment in the metaverse business was questioned by investors, he still had the ability to push forward the strategy and did not have to abandon investment plans because of shareholder opposition.
Snap shows another possible outcome of this structure.
The social media company's co-founder Evan Spiegel holds more than half of the voting power, and together with co-founder Robert Murphy controls more than 99% of voting rights, while publicly traded Class A ordinary shares basically have no voting rights.
For years, Spiegel has continued to push the augmented reality glasses business, even though it requires substantial research and development spending and its commercialization performance still faces challenges.
This year, activist investment firm Irenic Capital Management asked Snap to shut down, spin off or independently finance its glasses business and called for giving ordinary shareholders voting rights, but Spiegel still insisted on this long-term strategy.
As of October 30, Snap's stock price was about $5.34, down nearly 70% from its $17 IPO price in 2017.
For investors holding Snap ordinary shares, they can choose to sell the stock, but they have almost no way to change the company's strategic direction through shareholder voting.
Even if some investors believe management's decisions are damaging company value, they lack an important checks-and-balances tool found in traditional corporate governance structures.
The capital market's attitude toward this system is also changing.
In 2017, S&P Dow Jones Indices banned newly listed companies with multiple share class structures from entering the S&P Composite 1500 and its component indices, but this restriction was removed in 2023, allowing companies with special voting arrangements to regain eligibility for inclusion in relevant indices.
As AI companies continue to expand their financing scale, special equity structures are giving founders greater financing freedom while extending their control over the company.
For outside investors, buying shares in these companies means accepting a certain distribution of power: they can share in the gains brought by corporate success and must also bear the losses caused by strategic failure, but they may not have governance power commensurate with the scale of their investment.
The capital market can provide funding for founders' business empires, but that money does not necessarily buy corresponding power.
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