Board Seat
A position on the company's board of directors, giving voting power on major company decisions.
Definition
A board seat gives the holder voting power on major company decisions including fundraising, executive hiring/firing, budgets, and exit transactions. Investors typically negotiate board seats as part of funding rounds. A common early board structure is 2 founders, 1 investor, and sometimes 1 independent director. As more rounds are raised, investors may accumulate multiple board seats.
Why it matters
Board composition determines who controls major decisions at your company. If investors hold a majority of board seats, they can force decisions that serve their interests (like a sale) even if founders and employees would prefer a different path.
Example
After Series B, the board has 5 seats: 2 founders, 2 investors (one from Series A, one from Series B), and 1 independent. Major decisions require 3 of 5 votes. If both investors vote together, they only need one more vote to pass anything.