From Class Structure to Common Stock: The Corporate Overhaul
The most striking change in Relativity Space’s most recent certificate of incorporation (COI), filed on March 10, 2025, is the complete elimination of the company’s previous dual-class structure. The 2023 filing showed a complex capitalization with Class A and Class B Common Stock plus eight series of Preferred Stock (Series Seed, SAFE, Series A through F). This has been dramatically simplified to just Common Stock and two series of Preferred Stock: Series 0 and Series Z Junior.
This reorganization signals a major recapitalization of the company, with Schmidt effectively acquiring controlling interest through what appears to be a down-round financing. As reported by TechCrunch, Schmidt told employees he had “made a significant investment and had taken a controlling stake in the company.”
New Terms
The new governance structure grants extraordinary power to Series 0 Preferred stockholders (presumably Schmidt’s investment vehicle). The amended certificate creates a “Series 0 Directors” category with disproportionate voting rights:
“The Series 0 Directors who are serving on the Board shall collectively be entitled to cast a number of votes equal to the total number of authorized directors of the Corporation on all matters before the Board.”
This provision effectively gives Schmidt control of the board through his Series 0 shares, with additional protective provisions requiring “Requisite Series 0 Holders” approval for major corporate actions.
The new certificate also establishes a steep 30% annual dividend rate on the Series 0 Preferred Stock, which can increase to 45% following a “Triggering Event.” This aggressive preference structure suggests existing investors have been significantly diluted, corroborating reports that VCs have written down their Relativity investments “to either zero or nearly zero.”
Founder Transition and Cash Crunch
The restructuring comes as co-founder Tim Ellis steps down as CEO but remains on the board. As referenced in the TechCrunch article, Relativity faced cash shortages and struggled to raise additional funding. This likely precipitated the need for Schmidt’s rescue package.
The timing aligns with Relativity’s pivot away from its smaller Terran 1 rocket (which failed to reach orbit in its 2023 test) to focus entirely on the larger Terran R, designed to compete with SpaceX’s Falcon 9 and Falcon Heavy. With a reported $3 billion in launch contracts already secured for Terran R’s planned 2026 debut, Schmidt’s investment appears calculated to bridge the company through this critical development phase.
Broader Industry Context
Schmidt’s move mirrors a pattern in the capital-intensive space industry, where deep-pocketed individuals with strategic government connections often play outsized roles.
The restructuring also highlights the challenging economics of the private space industry. Despite raising nearly $2 billion from investors including Bond, Fidelity, Playground Global, and Social Capital, Relativity needed this dramatic intervention to secure its future.