Startup Boards, 2nd Edition

Chapter 6Size and Composition

How large should your board be, and who should be on it? This issue will come up multiple times over the life of your company.

The size of your board is directly related to the stage and complexity of the company. If you are pre-Series A (Startup), then a board of three is plenty. Once you have raised a Series A or Series B (Revenue), a five-person board should be adequate until you raise a later-stage round (Growth) or are starting to think about going public. At that point, your board will often expand to seven or nine people. Recognize that these are general guidelines, not specific rules.

The performance of the board is independent of size. We've been on unruly and ineffective three-person boards and high-octane nine-person boards. Ultimately, the composition and management of the board are more important than the number of people on it.

While it is not a requirement, most boards have an odd number of directors, which helps address the situation where you have a tie vote on an issue. However, during Matt's 20 years as CEO of Return Path, the company had long stretches with four or six directors, and it was never a problem. Matt's view was that if something came down to a tie vote, they had more significant issues.

Your board will have three different types of directors.

• Management: Founders, the CEO, or a management team member who works at the company.
• Investors: Institutional investors such as VCs. These can also be angel investors or a ...