Article · 15 min read

How to Create and Manage a Board

Y Combinator (Kirsty Nathoo and Aaron Epstein) · Y Combinator Startup Library Free Beginner

This is the canonical founder-side explainer of what a board actually is and when you owe someone a seat. It spells out the standard seed board (two founder seats, one investor seat, so founders keep the majority), why an outside/independent director gets added, and what the board formally approves, which is the exact gap between a board member and someone who just gives advice.

  • At seed the board is usually two founder seats plus one investor seat, so founders keep voting control; you do not have to give a seat at all if the round does not require it.
  • A board director votes on and approves the decisions that matter most (budgets, hiring or firing the CEO, selling the company, the next raise), which is a different thing from an advisor.
  • The independent seat is the swing vote; treat who fills it as a real decision, not a formality to hand the investor.
Open on ycombinator.com ↗

The question it answers

  1. What does a board seat in my term sheet actually let the investor do?

Read with it

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  2. In Indian deals the real control lever often sits next to the board seat: affirmative rights (reserved matters) in the term... Ediplis Counsels Article · 8 min read Affirmative Rights in a Term Sheet Namratha Krishnan
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