6Corporate Governance: Who’s the Boss?
When you raise money, the money wants a certain degree of control and a voice in the governance of the company. Some of the anecdotes contributed to this book illustrate how some real-world investors suffer from not having sufficient control or even a board seat.
As an entrepreneur, it is important to plan from the very beginning for how you will share control and give up more and more over time to investors. In each financing negotiation, the two primary cards on the table are valuation and control. You can expect that the VCs leading your series A will want something like two board seats. The VCs leading each subsequent financing round will each want one board seat. Many capital intensive deals that ...
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