Dear SaaStr: How Many Board Seats Do VCs Typically Get? | SaaStr

Dear SaaStr: How Many Board Seats Do VCs Typically Get?

Let me try to simplify, generally speaking:

1. Generally, “proportionate” boards are usually seen as fair, and easy to agree to. I.e., if the investors own 20%, and founders 80%, then investors get 1 board seat, that’s it. Founders can have 2 (or more) now, etc. If the investors own 50%, then split the board 50:50 (often with an outside to break a tie).’

So …

2. The best way to retain control, if that’s important to you, is not to sell too much. I know this sounds cute, but it isn’t. If you sell 80% of the company in 5 rounds, you won’t control the board, usually.

And, where you can, choose investors you trust.

Corner cases aside, this is the best most of us can do.

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• Source: https://www.saastr.com/how-do-startup-boards-and-their-seats-work-and-how-does-a-ceo-set-themselves-up-to-retain-control-of-the-board-when-incorporating/