Why companies have different classes of shares.

Every share carries some combination of three things: a vote, a claim on dividends, and a claim on what is left if the company is sold or wound up. Change the mix and you change the class. Ordinary shares, the founders' usual holding, typically carry all three in the plain vanilla form. From there, companies build variations for specific jobs.

Preference shares, the kind investors often take, sit ahead of ordinary shares in the queue when money is paid out. That is the liquidation preference, and it is the single biggest reason investors and founders end up holding different classes: the investor wants to be paid back first, and a separate class is how you write that down.

Growth shares are built to reward future value, giving their holder a share of the upside above a set point but little or nothing below it, which makes them a common tool for incentivising people without handing over existing value. Non-voting shares let you give someone an economic stake without a say in decisions. Alphabet shares, ordinary shares split into A, B, C and so on, let a company pay different dividends to different holders, which has its uses and its traps.

If you want to see how much the class can matter, look at Meta. Mark Zuckerberg owns only around 13% of the company by value, a minority stake that in an ordinary setup would leave him answerable to everyone else. He controls it anyway. The reason is a dual-class structure: the public holds Class A shares with one vote each, while Zuckerberg holds Class B shares that carry ten votes each, and that block gives him roughly 61% of the total voting power off a small slice of the equity.

The lesson is not the specific mechanism, which is a US structure and not a like-for-like template for a UK company (UK companies build control through their own articles and class rights, and any such structure needs proper advice). The lesson is the principle it makes vivid: two people can each be described as owning “shares,” and one of them can control the company while the other cannot influence it at all. The number of shares is only half the story. The class is the other half.

Because the class you hold determines what you actually own. Two people can each hold “ten per cent of the shares” and have wildly different economic and control positions, depending on the class. When someone tells you your stake, the number is only half the answer. The class is the other half, and it is the half people forget to ask about.