Glossary
Board Composition
The structure of a startup's board of directors — who has seats, voting rights, and authority over major company decisions.
By Amit Tyagi, Fitoor Capital · AletheiaAI Glossary
Definition
Board composition refers to who sits on a startup's board of directors and what powers they have. The board is the highest governing body of the company — it approves major decisions, hires/fires the CEO, sets strategy, and represents shareholders' interests. Getting board composition right is critical for long-term company control.
Typical startup board evolution: at incorporation — founders only. Post-seed — founders + 1 investor. Post-Series A — founders + 2 investors + 1 independent director. Post-Series B — founders + 3 investors + 1–2 independents. Boards typically range from 5–9 members. Larger boards are harder to manage and slower to make decisions.
India Context
Indian company law (Companies Act 2013) has specific requirements: listed companies need at least one-third independent directors and one woman director. For private companies, Companies Act requirements are more flexible, but SEBI AIF investors typically require formal board seat provisions in the SHA.
Indian founder tip: negotiate for an independent director you control the nomination of, as a counterweight to investor board seats. An experienced independent director (ex-founder, ex-CFO, domain expert) who is on the founder's side can be enormously valuable in board-level disputes with investors.
Example
Post-Series A board: 3 founders (2 board seats), Series A lead investor (1 board seat), Series A co-investor (1 observer seat, no vote), and 1 independent director (nominated by founders, approved by investors). 3 voting members total: founders have 2/3 votes and effective control. At Series B, investors typically request a second voting board seat, shifting control to 3:3 (deadlock) or 2:3 (investors majority).
Frequently Asked Questions
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