Full Definition
A board of directors is a group of individuals elected or appointed to represent shareholders and provide oversight and strategic direction for a company. In startups, board composition is a key negotiation point during fundraising.
Typical Startup Board Structure
- Pre-seed/Seed: Usually just founders (no formal board)
- Series A: Typically 3 seats — 1 founder, 1 investor, 1 independent
- Series B+: 5 seats — 2 founders, 2 investors, 1 independent
Board Responsibilities
- Approving major strategic decisions
- Hiring and evaluating the CEO
- Approving budgets and financial plans
- Overseeing governance and compliance
- Protecting shareholder interests
Real-World Example
After Series A, the board consists of the CEO, the lead VC partner, and an experienced independent director who previously scaled a similar company.
Related Terms
A non-binding document outlining the key terms and conditions of a proposed investment deal.
The primary investor in a funding round who sets the terms, contributes the largest check, and often takes a board seat.
A form of private equity financing provided by firms to startups with high growth potential.
Ownership interest in a company, represented by shares of stock.
A class of shares with special rights and preferences over common stock, typically held by investors.
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