Analysis of the Impact of Dual Shareholding Structures on the Governance of Technology-Based Firms

Abstract

As a matter of fact, since the technological revolution, the use of dual shareholding structures has become more and more widespread in technology-based companies as the number of technology-based companies has increased. These start-ups with dual shareholding structures have grown rapidly and have been able to grow into large corporations in a relatively short period of time. On this basis, dual equity structure seems to be a perfect match for many technology-based companies. In order to explore the positive effects and risks of dual equity structure on the corporate governance of technology-based companies, this paper investigates, studies as well as analyzes the issues. According to the analysis, it is concluded that dual equity structure is favorable to consolidate the founder's control over the company, expand financing, but harms the interests of small and medium-sized shareholders, and is detrimental to the equality of shareholders. Overall, these results shed light on guiding further exploration of firm governance.