Hi all, HN newbie here :). I was invited as a YC finalist back in April for our business which revolves around measuring shareholder control. Some of you told me you thought the community would find the link interesting, so I’m happy to oblige:
http://www.rotarygallop.com/2/post/2012/06/ownership-and-control-at-square.html
While the headline is Control at Square, I hope as fellow entrepreneur’s you’ll takeaway a few more broad points:
-Unless it is zero or greater than 50% , your percentage ownership reveals exactly nothing about your control.
-Sophisticated entrepreneurs and venture capitalists know this much, which is why they often advise letting control take care of itself. What they don't know is that the story doesn’t end there. (Almost no one knows this including activist’s investors I've worked with who take over companies for a living.)
-Control is not soft and fuzzy. It is definable, measurable, and manageable. Just like all the other metrics that drive your business, you can measure it, make decisions and move on.
Talk to me in the comments!
However, that's not what the author means by "control". He means the chance that a shareholder vote goes Jack's way, under the very large assumption that every other shareholder votes independently at random.
That doesn't seem a very meaningful statistic, especially if there are other groups of shareholders with shared interests (for example VCs may be more likely to have goals in common, and would be likely to vote their shares on a big issue together.)