Assuming zero knowledge... For example, what does it mean to own equity? If you own 10% of the company, I suppose it doesn't mean that you get 10% of it's earnings. I gues you would get 10% of dividends? But what if the company never decides to pay dividends? Since you only have 10%, there seems to be nothing you could do against it? Rather than pay dividends, the CEO holding 51% of the company could just decide to pay himself a salary of several million $?
Sorry if that sounds very stupid, but where does one ever learn about that kind of things as a unsuspecting citizen? Any pointers would be greatly appreciated!
Most startups don't pay dividends. Even Microsoft barely does. Owning 10% of a technology startup basically means you get 10% of the proceeds if the company gets bought, or hold 10% of the now tradeable shares if it goes public.
Someone holding 51% could pay himself all the company's profits as salary only if the company hadn't taken substantial investment. Otherwise the investors would have protection against such abuses as part of the deal terms, and the employees would thus be protected too.