Effective Strategies for Setting Up a Startup Board of Directors

How to set up your board of directors

Insight from Founders Jorunal

Everyone is talking about the drama with Sam Altman and the board members of OpenAI.

How do you avoid the same fate as Sam?

Let's listen in on how Bredd Adock thinks about board structures. He has raised over $1B and has constructed 4 boards in his career, so he knows what he's talking about.

His advice is to focus on four areas:

1. The board can make the decision to fire an executive by majority vote. Your goal is to control the majority of the board seats. Always try to have as small of a board as possible.

2. Independent board members suck at their jobs because they are incentivized to move slowly. They do not want to risk their reputation, especially at a hard-charging startup.

3. A special class of stock to get a super majority of voting is reserved for only the top class of founders.

4. You need to get buy-in with your investors that have special clauses if you would like to make major business decisions. To avoid this headache, try to run a competitive process during fundraising to get as much as you can.