Colosseum Corporation Inc., a logistics services provider driven by artificial intelligence, was the first local company to issue multiple voting shares since the government created the unlisted venture legal system last November, according to a statement released by South Korea on Wednesday.
Park Jinsu, the company’s founder and CEO, has received shares with ten voting rights each, the Ministry of SMEs and Startups said on February 21.
A share that grants a founder or other qualified shareholders more than one voting right is known as a multiple voting share class. Even if venture capital firms’ investments decrease the founders’ or management’s stakes, they can retain control of the company through the shares.
The law, which was amended last year to support venture businesses, stipulates that qualified shareholders must be the founders of unlisted companies with a cumulative investment attraction of at least 10 billion won ($7.5 million), including at least 5 billion won of the most recent funding.
The founder must own at least 30% of the total voting rights prior to the most recent investment round in order to qualify as the largest shareholder. The founder’s shareholding should drop to less than 30% with the most recent fundraising; if not, the founder will no longer be the biggest stakeholder.