Founders are often focused on maintaining at least 51% ownership of their companies. With 51%, they will be able to control the Company, and their destiny. At least that’s what they thought. In reality, the 51% control premium is often contracted away in the world of preferred stock venture financings.
In a typical venture financing, venture capital (VC) investors may end up with 25% of the Company, leaving 75% in the hands of the founders. However, the VCs will require that the Company enter into various contracts with them as a condition to the financing that shift control away from the founders and towards to the investors.