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In the context of sama's post, the formal board member will have made a financial investment. That means that s/he has committed either his/her own money, or th
by taylorwc 12y ago
In the context of sama's post, the formal board member will have made a financial investment. That means that s/he has committed either his/her own money, or that of an LP; in a good board member, this creates alignment and engagement--since the board member wants the company to succeed for financial and reputational reasons.
- foobarqux 12y agoPresumably the outside board members described by Sam Altman do not make a financial investment but, regardless, someone who has made an investment already has an incentive; they would be just an incentived with or without a board seat.
- taylorwc 12y agoI'd encourage you to reread Sam's post. The whole premise is that the typical terms of a Series A investment no longer include a board seat by default for said investor. He does say that board members don't have to be investors, but that " it’s very important to get an advisor with a significant equity position that will play the role of a board member."
- foobarqux 12y agoI did read the post, the argument is that startups aren't getting advice. I said that you don't necessarily need to give control (via board seats) to get advice. These advisors probably need some kind of incentive, likely significant equity, which makes investors a logical choice. They don't, however, need to have partial control over the company via board votes, unless the goal is something other than advice.
- abalone 12y agoBut advisors typically get equity. How much equity does a non-investor outside/independent board member typically get? If it's similar then I think the question still stands: how do outside board members materially differ from advisors apart from voting power?