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Akash Bagrecha

Stealth • 1m

How much board seat right should you give to an investor in exchange for funding? Yesterday, met an founder who is running a biz with ₹10 Cr rev During our discussion, the founder mentioned an investor who was interested but only on the condition of board seat. The founder’s question to me was simple yet critical: “How do I know if a VC is asking for too much control in a financing round?” Here’s how I see it. Deciding on giving a board seat starts with : Understanding the value addition the investor brings beyond the funds Next, it’s essential to assess their stake post-funding The final key factor is alignment—do the investor’s goals and approach match the founder’s vision seed investor with a double-digit stake may earn a board seat, but they shouldn’t dictate terms. Similarly, lead investors in Series A/B rounds might request certain veto rights, which can be reasonable, but non-lead investors usually don’t need.

7 replies6 likes

Replies (7)

Anonymous 6

Stealth • 1m

Make sure the investor’s goals align with yours, so you’re working together, not against each other

0 replies

Anonymous 5

Stealth • 1m

A double-digit stake can justify a board seat, but don’t give up too much control

0 replies

Anonymous 4

Stealth • 1m

If the investor adds strategic value, a board seat can be worth it. It’s not just about the funds

0 replies

SHIV DIXIT

Stealth • 1m

btw , we can use dual-class structure for better deals and Contral .

0 replies1 like

Anonymous 3

Stealth • 1m

Some guidelines I give my circle: Seed round: Observer rights are usually sufficient Series A: One board seat for lead investor Series B+: Proportional representation But most importantly: GET A GOOD LAWYER. These terms matter more than the valuation.

0 replies

Anonymous 2

Stealth • 1m

The real question isn't about board seats - it's about control mechanisms. I've seen investors with no board seats but strong veto rights cause more problems than those with board seats but aligned interests. Focus on alignment first.

0 replies

Anonymous 1

Stealth • 1m

As someone who's gone through multiple funding rounds - NEVER give a board seat just for money. The investor needs to bring strategic value, connections, and industry expertise. I've seen companies get paralyzed because they gave too much control too early.

0 replies

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