When you first start a company, subject to certain guidelines set by the State, the founders can more or less decide themselves on the size and composition of the board.
Most of the time, in the early days of a company the founders appoint themselves as board members. This is understandable as, in most cases, the founders all want to have their say in the running of the company. This is not necessarily a bad thing, but can lead to problems if there are four or more founders.
Sooner or later, if the company has any aspirations towards raising money, the number of founders on the board will have to be reduced. Be prepared for some fireworks: the startup world is full of disagreements as to which founders should remain on the board and which should step down!
If there are two founders, this is generally not a problem as they can both be accommodated on a board for a couple of investment rounds. If there are three or more founders, however, this is a potentially explosive situation and we recommend not appointing three or more founders to the board from the very first day of operation.
Tip: If there are three or more founders, one of which is the CEO, appoint just the CEO
to the board. In addition, appoint an independent outside director to the board and give
the other two founders board visitation rights (e.g., non-voting participation) to all board
meetings.
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