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Seed investor wants a board seat — is this normal?

Started by SeedRound_Sarah · Nov 29, 2024 · 11 replies
For informational purposes only. Not legal advice.
SS
SeedRound_Sarah OP

Raising $1.5M seed round. Lead investor ($750K) wants a board seat. I'm a solo founder. Is this normal at seed stage? What should I push back on?

VL
VCLaw_Partner Attorney

At seed with a $750K lead, a board seat is common but not mandatory. Typical structures:

Option 1: 3-person board (you + investor + independent). This is standard for seed with institutional investor.

Option 2: 2-person board (you + investor). Simpler but creates potential deadlock.

Option 3: Board observer seat instead. They attend meetings but can't vote. Good middle ground.

What to negotiate: Founder protective provisions (you can't be fired as CEO without board supermajority), independent director nomination rights, clear scope of matters requiring board approval.

FE
FounderExperience

My seed investor has a board seat. Honestly helpful — forces me to have structured monthly updates, gives me someone to pressure-test decisions with, and they actually helped recruit my VP Eng.

The horror stories are about Series A/B when you lose board control. At seed, you should still control the board if structured right.

BC
BoardControl

Key question: Who picks the independent director? If you do, you effectively control the board 2-1. If they do, they control it. If it's mutual agreement, it can stall.

Standard is mutual agreement but you should have the tiebreaker. Also: don't fill the independent seat right away. Keep it open until you find someone actually useful, not just a checkbox.

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