LEGAL
Governance & Compliance
Board Governance — What Early-Stage Founders Must Know
Board governance defines how your company makes decisions at the highest level. Even small startups must understand board composition, decision-making protocols, and fiduciary duties—especially when investors join the board.
Why it Matters
Even if you’re a 2-person team, your board is a legal requirement. Strong governance builds trust, enables fundraising, and prevents costly mistakes. Weak governance gets flagged in diligence.
Founders Checklist
Formally appoint board members via initial board consent
Hold board meetings or execute written consents for key decisions
Track and store meeting minutes, resolutions, and consents
Understand what actions require board vs shareholder approval
Align with Delaware corporate law and your bylaws
Founder Fails
Didn’t create board > invalid option grants and contracts
Made major hires without board signoff > breached bylaws
Forgot to document resolutions > red flag in investor diligence
When to ask for Help
Before adding any board members or formalizing a board structure
When issuing board consents or recording major decisions
If you're unsure which decisions require board or stockholder approval
To align governance structure with funding stages
During investor negotiations, especially for board seats
Frequently Asked Questions
Q: Do we need a board before raising money?
A: Yes — at a minimum, you must have one director for your Delaware C Corp. Add more as you raise capital or add outside investors.
Q: What decisions require board approval?
A: Common ones include:
Stock/equity grants
Fundraising
Option pool changes
Hiring/firing execs
Material contracts
Q: What’s the difference between a board resolution and a board consent?
A: Resolutions are voted on during meetings. Consents are written approvals signed without a meeting. Both are valid if done properly.