Money Buzz 11/04
IPO options, retirement plans and more
Let's Make a Dual
If fear of losing control of your company is the only thing stopping you from an IPO, then dual-class ownership probably sounds like a great deal. In this public company ownership structure-which has gained exposure since Google announced plans to use it in its public offering-founders receive "supershare" stocks that carry multiple votes, while the shares sold to the public carry one vote each. Typically, a dual-share system is structured so the founders retain a majority voting power, thereby retaining operational control and insulating the firm from takeover attempts.
But control bears a hefty price tag. "The market places a real discount on firms like this," says Andrew Metrick, associate professor of finance at the University of Pennsylvania's Wharton School. "To retain control, you could be looking at a 20 to 30 percent lower valuation."
Continue reading this article - and everything on Entrepreneur!
We make some of our best content available to Entrepreneur subscribers only. Become a subscriber for just $5 to get an ad-free experience, exclusive access to premium content like this, and unlock special discounts.
Entrepreneur Editors' Picks
Crypto Doesn't Have to Be Serious. Just Ask This Comedian Who Organized a Conference About Failure in the Industry.
Want to Succeed? Turn Your Fixed Mindset Into a Growth Mindset.
Google's CEO Is Asking Employees 3 Simple Questions to Boost Productivity
'Greatest Storyteller Wins.' Katy Perry on the Surprising Link Between Pop Stardom and Entrepreneurship.
The 5 Personalities You Meet in a Coworking Space
'Man's Best Friend' — and Investment: The Thriving Industry of Pet-Related Franchising