The Rise of Dual-Class Stock IPOs

The Rise of Dual-Class Stock IPOs

Dhruv Aggarwal, Ofer Eldar, Yael V. Hochberg, Lubomir Litov

Series number :

Serial Number: 

Date posted :

December 14 2021

Last revised :

December 14 2021
SSRN Share


  • dual-class • 
  • initial public offerings (IPOs) • 
  • Entrepreneurship • 
  • Corporate Governance • 
  • venture capital • 
  • Private Firms • 
  • Raising Capital

We create a novel dataset to examine the recent rise in dual-class IPOs. We document that dual-class firms have different types of controlling shareholders and wedges between voting and economic rights, and that the increasing popularity of dual-class structures is driven by founder-controlled firms. We find that founders’ wedge is greater when founders have stronger bargaining power.

The increase in founder control over time is due to greater availability of private capital and technological shocks that reduced firms’ needs for external financing. Stronger bargaining power is also associated with a lower likelihood of sunset provisions that terminate dual-class structures.


Real name:
Dhruv Aggarwal
Real name:
Lubomir Litov
Price College of Business, College of Law, University of Oklahoma
Real name:
Yael V. Hochberg