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Comment by tptacek | Hacker News Reader

I'm not the most informed person on HN who can respond to this but as a general rule it's within the bounds of normality to raise single-digit millions in unpriced rounds ("seeds") that don't generally have board seats attached, but your first significant priced round (your "A" round) will essentially always give up board seats.

Formal boards are not required for private companies.

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Delaware (and all or at least most other states) requires at least one member on the board of directors for any corporation, whether it's private or public.

For bootstrapped (for lack of a better term) companies these "boards" are pure formalities; it's a running joke among bootstrappers that they flip a coin to figure out who the listed corporate officers are going to be.

The incorporator, board member, investor, CEO (President), Treasurer, Secretary, and sole employee can all be the same person.

There's nothing legally requiring me to give any seats for investment though right?

Reading through this and my gutt feeling is that if I had a company doing really well I would do my absolute best to not give up any control over it - but idk how many investors would be willing to invest in that case (if we were doing really well though, I assume at least some would?)

In practical, ordinary terms, there's nothing legally requiring you to give board seats to any investor.

Yeah somewhere around Series A and esp Series B chances are, unless the founders really lucked out (eg, equity funding that could have been a debt round due to insane profits), they'll have lost control

I don't think losing control after an A round is totally normal.

shares: preseed / seed / A / option pool + multiple cofounders means CEO is a minority holder, and common may be as well. for firms raising big seeds, I expect even more likely at the A.

board: many co's give 1 board seat at Seed and another at A, so lose the board around B. but more negotiable, eg, seed investor gives seat to later investor .

So it seems normal: for most, somewhere between A + B, and except for outliers, by C.

Edit: VCs generally have an ownership target, say 15% as a lead, and less as a follower. So that adds up quickly.

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