Will You Get to Sit on the Board of Directors?

When you buy equity in an early-stage startup, you are quite literally buying a piece of that company. That makes you a part owner.

But what does being a “part owner” of a startup really mean? Will you be able to call up the CEO on his cellphone, ask for personal favors, or make recommendations for key hires?

Can you dictate that company’s marketing strategy? Will you be heard when you have concerns to share? Do you even get a vote?

Unless you’re on the board of directors, the answer is probably “no.”

The board of directors is a panel of experts and investors that help manage a startup’s business affairs. The board helps out with everything from appointing chief executives to writing company bylaws and more.

In short, the board of directors comes up with long-term strategies, which the startup’s officers are then obligated to fulfill.

Normally, only the biggest investor in each round ends up with a seat on the board. So, if you invest the minimum amount in a startup alongside someone who throws in a cool million bucks, you aren’t going to be the one sitting at the table when it’s time to pick a CFO or decide whether to offer dividends to shareholders.

If you watch Shark Tank, you may recall that many of the entrepreneurs who pitch to the Sharks actively request that the ones who invest take a seat at the board of directors. That’s because the legendary Shark Tank investors are coveted experts in their field, each with dozens (if not hundreds) of deals under their belts.

As you can imagine, each of them picks and chooses his or her board seats carefully. After all, sitting on the board of directors is no cakewalk. There are regular meetings to attend, big decisions to make, and complicated matters of business management to address.

That’s why, when you’re first starting out, you shouldn’t worry too much if you aren’t invited to join the board. It’s a lot of work, and really, only the most valuable candidates should be able to earn a seat.

Want to learn more about what it means to be on the board of directors? Just check out the video above.

Until next time,

Neil Patel

Comments

9 responses to “Will You Get to Sit on the Board of Directors?”

1. I have no experience in trading .I don’t know where to start. which trading offices should i contact. i need all the help you can give me to start.

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2. I have no experience in trading either and I have not received any information on how to get started.

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3. I have absolutely not trading experience at all . but im definitely ready to give this a go . i need advise on where should i begin ? And with a small amount of cash . please your input will be very valuable to me

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4. I have been self teaching and have learned a lot I’m ready to put what I’ve learned to the test.

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5. I do not have any experience in trading but I am willing to learn. From what I have heard I am fired up ready to go.

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6. like everyone else i’m also a newbie and i need guidance in the procss of reaching my goals. Help!

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7. I’d like to join the Startup Investor. Please contact me.

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   • Hi Esther,

     Thanks for your comment! This is the Startup Investor webpage, but if you’d like to join Angels & Entrepreneurs, here’s a link you can try! https://purchases.angelsandentrepreneurs.com/AGNLNCINTNLP/WAGNV9DI/index.htm?pageNumber=2&h=true&src=ae-home-button&link_source=html&vidTime=0

     All the best,
     Sarah

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8. Newbs with no prior investment experience should not be investing in early stage startups.

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