As I’ve explored some of the more confusing terminology of VC term sheets, I have received a number of questions regarding the composition of the Board of Directors – specifically who should control the Board following a Series A financing.
Controling the board, of course, means controling the corporation. Thus, the composition of the Board is an important and sensitive issue to founders. Sadly, we’ve all heard the horror stories of founders being “fired” from the company they founded.
It has traditionally been rare for the founders to control the Board following a Series A financing (despite the fact that Series A investors do not generally acquire a majority stake in the venture). Sometimes the investors push to control the Board, but this is relatively uncommon as well. Instead, there is typically a “compromise” in which neither the investors nor the founders technically control the Board.
To read the full, original article click on this link: Demystifying the VC term sheet: Board control | VentureBeat
Author: Scott Edward Walker
