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Board of DIrectors

Early-stage Boards Have Too Many Venture Capitalists. Here’s What To Do About It.

Venture capitalists (VCs) dominate the boards of venture-backed private companies today. In a 2017 study that looked at more than 26,000 such boards over three decades, researchers found that VCs took 50 percent of total board seats. That fraction is the result of many things: VCs requirement to take board seats as a condition to funding, limited planning for the most effective board composition, and a lack of concern for what type of background board members need to best serve the organization. It reflects what happens when companies follow the currently accepted practice of distributing one or two board seats to the lead investor in each funding round.