Control & governance
Board seat
Also called Board director, Investor director
A place on the company's board of directors, carrying a vote on major decisions and legal duties owed to the company rather than to the investor who appointed you.
In plain English
The board hires and fires the chief executive, approves budgets and financings, and signs off on a sale. A seat is the only mechanism that gives an investor genuine influence over a company's direction, as distinct from a veto over specified events.
At seed a board is typically three people: two founders and one investor director appointed by the lead. At Series A it usually becomes five, with two founders, two investors and an independent director whose vote decides contested questions. The composition is negotiated and it matters more than most term-sheet line items.
The duty structure surprises first-time directors. A director owes fiduciary duties to the company and its shareholders as a whole, not to the investor who appointed them. Voting to protect your own fund's position against the company's interests is a breach of duty, and the conflict is real in situations such as down rounds and sales.
There is also personal exposure. Directors can be liable for wrongful trading, unpaid taxes, health and safety and employment matters, and the exposure varies considerably by jurisdiction. Directors' and officers' insurance is not a luxury, and a company that will not fund it is telling you something.
What it means for your cheque
Almost no angel should want a board seat, and angels who ask for one on a small cheque mark themselves as inexperienced. It carries real legal duties, real personal liability, a meaningful time commitment, and it puts you on the wrong side of confidentiality when you want to talk to other investors.
The exception is the angel who is genuinely operating alongside the founders — a former operator in the same sector, writing a large cheque, whom the founders actively want in the room. If that is you, the founders will offer it. If you have to ask, it is not you.
Do the arithmetic
How board composition shifts across rounds
A typical progression, and what it means for who controls the company.
| Pre-seed | 2 founders. Founders control absolutely |
|---|---|
| Seed | 2 founders, 1 investor director. Founders control |
| Series A | 2 founders, 2 investors, 1 independent. The independent decides |
| Series B | 2 founders, 3 investors, 1 independent. Investors control |
| Where an angel sits in all of this | not on the board — represented by the lead investor's director, at best |
Control passes from founders to the board around Series A and to investors around Series B. Angels influence this only through the choice of lead, which is a reason to care who leads a round you join.
At the table
What to negotiate
- If you are not writing a very large cheque, do not ask. Ask for an observer seat or good information rights instead.
- If you are offered one, confirm the company carries directors' and officers' insurance before accepting.
- Understand that you will owe duties to the company, which will occasionally conflict with your interests as an investor.
- Establish the meeting cadence and preparation expectations. A real board seat is a genuine time commitment.
- Check whether the seat is tied to maintaining a minimum holding, which is standard and reasonable.
Around the world
How this differs by market
Delaware fiduciary duties are well developed and heavily litigated, with a large body of case law on conflicts in down rounds and sales.
LATAMLocal-entity directorships can carry personal liability for tax and employment obligations. Sitting on the parent board is generally the safer position.
EUUK directors' duties are codified in the Companies Act, including a duty to consider creditors when insolvency becomes likely — a real exposure in a failing startup.
APACDuties and liabilities vary widely. Some jurisdictions impose criminal liability on directors for company defaults, so take local advice before accepting a seat.
Board seat: common questions
Should I ask for a board seat as an angel?
Who does an investor director represent?
What does an independent director actually do?
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