What is the Board?
The board of directors oversees company strategy, hires and fires the CEO, approves major transactions, and represents shareholder interests. Board composition changes as companies raise money.
Board Structure Evolution
Pre-seed: Often just founders. Seed: Might add one investor seat. Series A: Typically 5 seats (2 founders, 2 investors, 1 independent). Later stages: More investor and independent seats.
Board Control
Control matters for major decisions: selling the company, raising money, hiring executives. Founders should try to maintain board control through Series A, but often lose it by Series B.
Formula
Common board structures:
- Seed: 3 seats (2 founders + 1 investor)
- Series A: 5 seats (2 common + 2 preferred + 1 independent)
- Series B+: 7 seats (2 common + 3 preferred + 2 independent)
Example
Series A board composition:
- Seat 1: CEO/Founder (common)
- Seat 2: Co-founder (common)
- Seat 3: Lead investor partner (preferred)
- Seat 4: Second investor (preferred)
- Seat 5: Independent director (mutually agreed)
Founders + independent = majority control if independent is aligned.