A supermajority vote is a higher-than-simple-majority threshold required to approve specific decisions, often two-thirds, three-quarters, or unanimous.
Plain definition
A supermajority vote is a decision threshold higher than a simple majority. Common thresholds are two-thirds, three-quarters, or four-fifths of the votes cast or shares outstanding. The threshold is written into the bylaws, the shareholders agreement, or the certificate of incorporation, and it applies to defined categories of decisions.
Supermajority requirements are protection mechanisms. They make sure that consequential decisions, like a sale of the company, an amendment to the share structure, or a change to the operating agreement, cannot be approved by a narrow majority over the objection of a substantial minority.
A supermajority vote is the threshold that decides whether a minority position can stop a decision the majority wants to make.
What goes wrong
A 75 percent threshold gives any holder of 26 percent or more an effective veto over the listed decisions. After two rounds, a single early investor with 27 percent can block a sale, a recapitalization, or a structural change indefinitely. The threshold was supposed to protect the company. It now decides what is possible.
Bylaws and shareholders agreements often layer supermajority requirements over each other across decision categories. Sale of the company at 75 percent. Charter amendments at two-thirds. Issuance of new senior shares at unanimous. Founders rarely build the full decision matrix until a transaction is in motion, by which point the configuration is fixed.
A new round adds a supermajority requirement on a decision the previous structure did not protect. Information rights expand, board observation rights expand, and the new threshold appears inside the same package. By the time a future decision needs to move, the threshold has already shifted who can hold up the room.
The bylaws have a 75 percent threshold to amend the bylaws. The threshold no longer matches the cap table. Changing it requires the same 75 percent vote that the structure now makes hard to assemble. The fix becomes its own deadlock.
Founder questions
Bigger picture
A veto right gives one party the ability to stop a decision. A supermajority threshold gives any sufficiently large minority the same effective ability across the listed categories.
Related structure Reserved MattersReserved matters define which decisions need a higher level of approval. Supermajority thresholds define how high that level actually sits.
Related structure Governance Basics for Growing CompaniesThe base layer of how thresholds and consent rules compound into the decisions a company can and cannot move on.
Related reading
The signal that thresholds and consent layers have begun to decide what the company can do.
Related readingThe essay-length view of how voting structure compounds into who actually runs the company.
Related readingWhy the search for unanimous agreement, formal or informal, is sometimes the structural problem.
Bring the bylaws, the cap table, and the decision the threshold is blocking.