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 the 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). Very few Silicon Valley-style VCs will push for a non-proportionate board.
So …
2. The best way to retain control, if that’s important to you, is simply 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.
A related post here:
