Mistakes<\/em>: When investors have voting rights you have to follow certain formalities. If you forget to follow them you\u2019re cleaning up a mess.<\/li>\n<\/ul>\nI anticipate two objections:<\/p>\n
\n- First Objection<\/em>: VCs and other investors writing big checks get voting rights, so why shouldn\u2019t Crowdfunding investors?<\/li>\n
- Second Objection<\/em>: Even if they don\u2019t help run the business on a day-to-day basis, shouldn\u2019t investors have the right to vote on big things like mergers or issuing new shares?<\/li>\n<\/ul>\n
As to the first objection, the answer is not that Crowdfunding investors should<\/em> get voting rights but that VCs and other large investors shouldn\u2019t<\/em>. The only reason we give large investors voting rights is they ask for them, and our system is called \u201ccapitalism.\u201d<\/p>\nBefore the International Venture Capital Association withdraws its invitation for next year\u2019s keynote, I\u2019m not saying VCs and other large investors don\u2019t bring anything but money to the table. They can bring broad business experience and, perhaps most important, valuable connections. A non-voting Board of Advisors makes a lot of sense.<\/p>\n
The second objection is a closer call. On balance, however, I think that for most companies most of the time it will be better for everyone if the founder retains flexibility.<\/p>\n
To resolve disputes between the owners of a closely-held business we typically provide that one owner can buy the others out or even force a sale of the company. Likewise, while we don\u2019t give Crowdfunding investors voting rights we should try to give them liquidity<\/em> in one form or another, at least the right to sell their shares to someone else.<\/p>\nGive investors a good economic deal. Give them something to believe in. But don\u2019t give them voting rights.<\/p>\n
Questions? <\/strong>Let me know.<\/a> <\/p>\n\n- SEO Powered Content & PR Distribution. Get Amplified Today.<\/a><\/li>\n
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- Source:<\/span> https:\/\/crowdfundingattorney.com\/2022\/08\/04\/think-twice-before-giving-crowdfunding-investors-voting-rights\/<\/a><\/li>\n<\/ul>\n","protected":false},"author":1,"featured_media":1785361,"template":"Default","meta":{"_eb_attr":"","type":"","auto_type":false,"post":"","stream":"","stream_url":"","waveform_data":[],"duration":0,"start":0,"end":0,"bpm":0,"downloadable":false,"download_url":"","purchase_title":"","purchase_url":"","post-count-all":0,"like_count":0,"download_count":0,"editor_note":"","copyright":"","captions":[],"sources":[]},"genre":[10645],"station_tag":[21579,13775,9160,40284,22759,4437,18340,10095,9773,12454,11482,10628,40724,8803,10802,23439,20721,9610,13212,12619,14449,4139,14383,13655,16785,3997,13083,40256,4053,3635,3886,24510,3887,12200,4737,7664,7101,3828,3889,3830,12144,4299,40444,5009,16792,4155,12466,3835,40829,22089,4165,10043,39858,9706,9166,8066,40057,3772,4067,4069,39880,4177,4534,13776,40035,34012,4006,19651,23197,4491,29248,9238,3732,12342,3650,3906,9365,19265,3908,9237,3954,28970,4476,3699,3700,41066,40740,3653,27832,13648,3806,29070,13777,15518,11042,10384,12343,3705,9483,20482,14094,31333,40065,17454,3663,19503,4900,4427,5030,40067,3966,9230,11471,7457,8453,9642,9054,40071,4480,39974,22430,30324,3921,4674,4458,13653,15409,3777,3711,3872,39869,3779,9173,9174,5126,4283,39843,4124,40914,4228,13215,39845,13284,9871,3671,19267,10873,9872,18488,6198,4365,4918,4366,3783,7112,4367,9178,11454,3941,27168,11461,467,13217,14555],"artist":[13860],"mood":[],"activity":[],"_links":{"self":[{"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/station\/1785360"}],"collection":[{"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/station"}],"about":[{"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/types\/station"}],"author":[{"embeddable":true,"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/users\/1"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/media\/1785361"}],"wp:attachment":[{"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/media?parent=1785360"}],"wp:term":[{"taxonomy":"genre","embeddable":true,"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/genre?post=1785360"},{"taxonomy":"station_tag","embeddable":true,"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/station_tag?post=1785360"},{"taxonomy":"artist","embeddable":true,"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/artist?post=1785360"},{"taxonomy":"mood","embeddable":true,"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/mood?post=1785360"},{"taxonomy":"activity","embeddable":true,"href":"https:\/\/platodata.io\/wp-json\/wp\/v2\/activity?post=1785360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}