Demystifying the VC term sheet: Board control by Scott Edward Walker

  • Source link: https://venturebeat.com/2011/03/14/demystifying-the-vc-term-sheet-board-control/
  • TL;DR: Gave some norms for what BoD agreements look like. Not sure how relevant this is anymore given that this was written in 2011, but the advice at the end is evergreen
  • How helpful?: 2/5
  • Topic Tags: BoD, term sheet, negotiations
  • Relevant questions addressed:
  • How should I negotiate BoD terms?
  • Summary bullet points
  • It is traditionally pretty rare for the founders to control the board after series A
  • Usually there is a compromise in board control in which the “tiebreaking” member is a mutually agreed-upon 3rd party
  • Recently [[keep in mind this was written in 2011]] the pendulum has swung significantly in the founders’ favor (particularly in the Bay area)
    • Lots of negotiating leverage if you have a “hot” startup
  • You should also push for the investor to actually name a representative on the board to avoid them sending over a junior staffer instead of a heavyweight partner

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