Dual-class shares are unnecessary in private markets due to illiquidity
Scott Kupor · How to Raise Money from a Venture Investor · Jun 14, 2019 · at 21:41
Scott Cooper, partner at Andreessen Horowitz, explains why dual-class voting shares (like those used by Google and Facebook in public markets) are rarely needed during early-stage private financing.
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“The reason why those tend not to exist in the private markets is we're all completely aligned, which is none of us have liquidity, right? So we can't, you know, in general, and many times we are prevented from selling our shares legally, so there's no liquid market, and we have a time horizon that's consistent with the entrepreneur's time horizon, right?”
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