Board Seat

A board seat gives an individual a vote on the company's board of directors, which oversees major strategic decisions including executive hiring and firing, fundraising, acquisitions, and budget approval. In venture-backed startups, board composition is a key negotiation point: founders want to maintain control, while lead investors want governance oversight.

Typical early-stage board structures include three seats (two founders, one investor) or five seats (two founders, two investors, one independent). As a company raises more rounds, investors typically request additional seats. Founders should be strategic about board composition because losing board control means losing the ability to make unilateral decisions about the company's direction.

Board seats come with fiduciary duties: the obligation to act in the best interest of all shareholders, not just the entity that appointed the board member. In practice, investor board members balance their fund's interests with their fiduciary duties. Board observer seats (which provide attendance rights but no vote) are a common compromise for investors who want visibility without a formal governance role.