Dual-class shares are back in the headlines. In his September 27 edition of The Innermost Loop, Dr. Alex Wissner-Gross noted in one line that Anthropic “readies founder super-voting shares for an IPO.” According to TechCrunch, citing The Information, the company is asking shareholders to approve special shares that would give its seven co-founders a combined 50.1% of the vote on most corporate matters. Those are press reports, not a public filing, so the final terms may differ.
You do not need a trillion-dollar valuation for this to matter. The same question lands on every founder who raises outside money: how do you sell equity without selling control? The short answer is that control is written into your charter, early, and it is very hard to add later.
What Dual-Class Shares Mean for Your Business
In a standard corporation, one share gets one vote. Own 20% of the stock, and you hold 20% of the votes. Dual-class shares break that link. The company issues two (or more) classes of common stock with identical economics but different voting power, for example one vote per share for investors and ten votes per share for founders.
The result is that founders can dilute their economic stake round after round while keeping the votes that elect the board and approve major decisions. That is the structure Meta and Snap used to keep their founders in charge after going public, and it is what the Anthropic reports describe, with a twist: the super-voting power would reportedly belong to a group of founders together rather than one person.
For a private company, the same tool shows up in quieter ways: a founder who takes a large angel check, a family business bringing in a minority partner, or a professional practice selling equity to key employees. In each case the owner wants to share the upside without handing over the steering wheel. If you are still getting oriented on who owns what, start with our Cap Table 101 guide.
The Legal Impact: 6 Rules for Dual-Class Shares
1. Voting power lives in the charter, not in a handshake
Delaware lets a corporation issue classes of stock with “such voting powers, full or limited, or no voting powers” as the charter states (8 Del. C. § 151(a)), and the one-vote-per-share default applies only “unless otherwise provided in the certificate of incorporation” (8 Del. C. § 212(a)). A side letter or a verbal promise that “the founder calls the shots” does not create dual-class shares. The certificate of incorporation does.
2. Illinois has a default most founders have never heard of
Under the Illinois Business Corporation Act, 805 ILCS 5/7.40, each share gets one vote and shareholders may cumulate their votes in director elections. Cumulative voting can hand a minority holder a board seat. The same section lets the articles of incorporation limit or eliminate cumulative voting and create special voting rights for a class. If you formed an Illinois corporation from a template and never touched the articles, check which default you are living under before you add dual-class shares on top of it.
3. Adding super-voting shares later usually needs the other side’s vote
Delaware gives holders of a class the right to vote as a class on a charter amendment that would “alter or change the powers, preferences, or special rights” of their shares so as to affect them adversely (8 Del. C. § 242(b)(2)). In practice, once investors hold stock, they have leverage over any restructuring that shrinks their vote. That is why Anthropic is reportedly seeking shareholder approval, and why dual-class shares are cheapest to set up before the first priced round.
4. The stock exchanges lock the door at the IPO
Nasdaq Rule 5640 bars listed companies from disparately reducing the voting rights of existing public shareholders, and names “the issuance of super-voting stock” as an example. Nasdaq’s interpretive policy says the restriction is aimed at issuing a new class, so companies that already have a dual-class structure can generally keep issuing that stock. The practical lesson: dual-class shares have to exist before the company goes public. If an exit by IPO is even a possibility, the charter decision belongs on the agenda now.
5. Voting control makes you a “controlling stockholder,” with duties attached
Delaware’s 2025 amendments to 8 Del. C. § 144 define a controlling stockholder as someone who holds a majority of the voting power, has the contractual right to elect a majority of the board, or holds at least one-third of the voting power plus managerial authority. Super-voting founders will often meet that test. Transactions between the company and its controller, such as a founder buying assets, taking a special payout, or taking the company private, get safe-harbor protection through approval by a committee of disinterested directors or an informed vote of disinterested stockholders; going-private deals need both, and otherwise the deal must be shown to be fair. Control is a right, and it comes with a process.
6. Investors will price control, so negotiate the terms that matter
Sophisticated investors rarely reject dual-class shares outright. They negotiate around them. Terms that commonly come up include a sunset that converts high-vote stock to ordinary stock after a set period, automatic conversion when a founder sells or transfers shares, a minimum-ownership threshold (the Anthropic proposal reportedly ties the group vote to founders keeping minimum stakes), and protective provisions that still require investor approval for specific decisions. For an LLC, the same allocation lives in the operating agreement rather than a charter, but the negotiation looks the same.
One caution for regulated businesses: in licensed industries such as cannabis, a change in who controls the company can itself require regulator approval. See Cannabis Industry Lawyer’s guide to cannabis holding company structure before you reshuffle voting power.
What Howard East Clients Should Do Now
- Pull your charter or operating agreement. Confirm whether you have one class of voting stock, cumulative voting, or any special voting rights today.
- Decide before the term sheet, not after. If founder control matters, raise dual-class shares before the first priced round, when the only vote you need may be your own. Our convertible notes vs. equity breakdown covers how early instruments affect this timing.
- Put co-founders on the same page. A group voting structure only works if the founders agree on how they vote together. Review our checklist for bringing on a co-founder.
- Plan the sunset. Decide what happens to your dual-class shares on death, departure, sale, or a fixed date, and write it down.
- Paper the controller process. If you will be a controlling stockholder, set up the independent-director or disinterested-vote process before your first related-party deal.
If control is already contested, it is a dispute rather than a planning question. Howard Law Group handles commercial litigation, including shareholder and partner fights. For drafting, see its page on operating agreements and bylaws.
Related reading: Voting Control: 6 Critical Terms Owners Miss in 2026 covers the Delaware and Illinois statutes and the LLC voting default.
Talk to Howard East About Founder Control
Howard East advises founders and closely held companies on charters, capital raises, and governance so the people who built the business keep the ability to run it. See our founder-led company legal map, then book a consultation with our corporate team about dual-class shares and founder control before your next raise.
This article is for informational purposes only and does not constitute legal advice. Reading it does not create an attorney-client relationship. Corporate law varies by state; consult a licensed attorney about your specific situation.
