Formulas for Startup Success

Venture Hacks is a site by two entrepreneurs who've been through the mill and want to share the basics they've learned. Their collection of easy-bake startup recipes includes these guidelines for board memberships:

After the Series A investment has closed, the common stockholders are probably going to own most of the company. The common stockholders should therefore elect most of the board seats. Let’s assume the common stockholders own approximately 60% of the company after the Series A.
If you’re taking money from two investors, the board should look like

3 common + 2 investors = 5 members.

And if you’re taking money from one investor, the board should look like

2 common + 1 investor = 3 members.

In either case, the common stock should elect its directors through plurality voting. Plurality voting enables the founders to elect all of the common seats if they control a majority of the common stock.

Why are they doing this for free? No doubt to raise their own profiles and expand their personal networks. But one commenter on Valleywag chimed in, "The founders of [immediately successful] companies wouldn't waste time ... founders who have been screwed over have reason to be passionate."