Boards and advisory boards in startups
What a board does and how it is structured, investor seats, running effective meetings, setting up an advisory board and giving advisors equity.
By Editorial Team
As a company grows and raises money, its governance matures. A well-built board and advisory board give founders strategic support, experience and networks.
The board
In joint-stock companies the board is the legal body responsible for managing and representing the company; see limited or joint-stock. Its duties:
- Setting strategy and approving major decisions
- Budgets, funding rounds and senior hires
- Overseeing finances and risks
- Supporting the CEO and holding them accountable
Structure
Early on, the board is usually the founders. Investors gain seats in funding rounds, set at term sheet stage. Common structures:
- After seed: two founders + one investor
- After Series A: founders, investors and one independent member
An independent member balances founders and investors and brings industry experience.
Effective meetings
- Send a short pack a few days before: metrics, highlights, challenges and decisions needed; see our investor update guide.
- Use meeting time for discussion and decisions, not updates.
- Record decisions and owners in minutes.
- Quarterly meetings are common early on.
Advisory board
An advisory board is not a legal body; it is a way to get regular input from experienced people.
- Pick experts where you are weak: sales, a sector, international growth, technology.
- Put expectations in writing: hours per month, which topics.
- Advisors bring introductions and credibility; see our mentor guide.
Advisor equity
Early advisors usually receive small amounts of equity or options, depending on contribution and stage. Apply vesting as with founders and sign an advisory agreement. Track these grants on your cap table.
Conclusion
Boards of the right people help founders make better decisions. Choose members for contribution and fit, not titles.
This guide is for general information only and is not legal, financial or investment advice. Check official sources and consult professionals for current terms.
