Anthropic's IPO Keeps Founders in Control Through a "Founder LLC" Voting Structure

The list of companies planning to sell shares to the public has gained an unusual new member. Artificial intelligence (AI) company Anthropic, which makes the Claude platform, officially filed its Form S-1 registration statement with the Securities and Exchange Commission (SEC) today.

The filing prepares Anthropic for a possible debut on the Nasdaq stock exchange under the ticker ANT. But behind Anthropic's huge computing needs and very fast revenue growth is a system for controlling the company that potential investors should pay close attention to.

In Silicon Valley, public investors have often had little say in how companies are run. Large companies like Alphabet (GOOG -1.17%) (GOOGL -1.03%), Meta Platforms (META -1.65%), and Space Exploration Technologies (SPCX +0.33%) have built powerful businesses using two or three types of stock. These systems let public investors own a share of the company and benefit from its financial success, while special shares keep control of the boardroom in the hands of company insiders.

But Anthropic's proposed system goes further than these arrangements that favor founders. Instead of simply giving some shareholders more votes because of the type of stock they own, Anthropic separates financial ownership, shareholder voting, and board oversight into five different classes of shares.

Data from Anthropic's S-1 filing.

The 4 Major Differences

1. One special voting share instead of billions of shares (Class F)

SpaceX and Meta use a similar approach. Elon Musk and Mark Zuckerberg can control shareholder votes because they own large numbers of special Class B shares that carry extra voting power. They can turn these shares into ordinary stock if they want to raise money for themselves, but doing so would gradually reduce their voting power.

Anthropic's founders have created Class F common stock, which consists of a single share held by the founders' LLC. This share has no financial rights, so it does not give its owner a share of profits or dividends. However, it gives the co-founders 50.1% of all votes on general company matters. For most decisions that need a simple majority, the votes held by other share classes do not change the result: Class F decides the outcome.

Class E is another type of stock that gives its holders voting rights but no financial rights. However, it does not affect ordinary shareholder votes. Instead, its holders control the structure of the Long Term Benefit Trust (LTBT), Anthropic's status as a Public Benefit Corporation (PBC), and changes to Anthropic's Charter. This helps stop Class F holders from changing the company's structure whenever they want.

2. The board has an independent safety check (Class T and the trust)

Elon Musk sits on SpaceX's board. SpaceX is a company controlled by its founder, and its board reports directly to him under a system that gives him strong control.

At Anthropic, the LTBT is an independent group of experts in AI safety, national security, and public policy. This group holds the Class T shares. These shares have no financial value or claim to profits, but they give the trust the only right to elect and remove a majority of the Board of Directors. The founders control 50.1% of ordinary shareholder voting power through Class F shares, but they cannot use those votes to overrule or remove the majority of board members chosen by the trust.

3. Major cloud partners cannot control the company (Class N)

Large technology companies, including Amazon (AMZN +0.34%) and Alphabet, have invested billions of dollars in Anthropic over the years. To stop major business partners from gaining control of the board or causing antitrust and regulatory problems, Anthropic created Class N common stock. Class N shares give their owners full financial ownership of the company but no voting rights.

4. The company's mission comes before shareholder value (PBC status)

Meta and Alphabet are ordinary corporations registered in Delaware. Their boards generally have a legal duty to create value for shareholders who own stock. SpaceX moved its registration to Texas in 2024.

Anthropic is registered in Delaware too, but it is a PBC. Its charter requires the board to balance financial returns with the goal of "responsible development and maintenance of advanced AI for the long-term benefit of humanity." If the trust decides that making money conflicts with safely putting AI into use, the board chosen by the trust can legally put safety ahead of returns for shareholders.

Remember, the trust holds Class T shares and can replace the Board of Directors if needed. That gives it real power.

The Bottom Line

Alphabet was an early user of non-voting Class C stock, which helps it pay employees with shares without giving up the founders' majority control. Meta has adopted a similar plan, creating Class C shares to help fund $140B in AI infrastructure and cover personal tax bills while permanently protecting Mark Zuckerberg's 61% voting majority from being reduced by outside investors. At SpaceX, Musk has total control because his large number of extra votes gives him overwhelming power in the boardroom.

Under Anthropic's proposed system, the founders hold 50.1% of ordinary voting power through a Class F share that has no financial rights. At the same time, they have given an independent safety trust (Class T) ultimate control over the board. People who buy Class A shares in the public offering will have a financial stake in the business, but control over company decisions will remain with the holders of Class F and Class T shares.

With Anthropic, Wall Street investors would help pay the company's huge computing bills, but they would never get a real say in how it is run. Make sure you are comfortable with this arrangement before buying Anthropic shares.