I am interested in investing some of my money in a few companies in exchange for equity. I am undecided if I should, for example, invest £5,000 in one company and have voting rights and pre-emption or perhaps £1,000 in 5 different companies with no voting rights or pre-emption. I am doing this using a crowdfunding site.

The amounts are just examples.

I am not so sure if 0.1% in equity would matter for anything and if the company would seek further funds in exchange of more equity I know I would still be notified and I would have the chance to buy more equity if I wanted.

Considering the above, I believe companies just offer voting rights to "bigger" shareholders as to prevent too much paperwork with the tiny investors and they also want to make the "bigger" investors feel important for having those rights but I don't see this as a big benefit.

Should I increase my offer just to get the rights? Are there any advantages that I am missing here?

  • Some downvote, some upvote. What's so controversial about this question? Feedback from downvoters would be appreciated. – Fabio Milheiro Mar 4 '15 at 13:07

If you don't have any voting rights then you don't have much say in the direction of the company. Of course, if the majority of voting rights are held by 1 or 2 people/institutions then you probably don't have much say regardless.

That said, 0.1% isn't a whole lot of a voice anyway.

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