Financing Term Sheet Deep Dive: Board Representation

Whether you’ve only recently decided to seek out capital for your business or you’ve already received (or made) your first offer, the term sheet (or “letter of intent”) is an integral part of the process.  In this series we’ll look to shed some light on the legal language contained in that term sheet by taking a “deep dive” into the most often used terms and how choices made in selecting those terms can affect both Company and Investor.  Check out an overview here.

Financing Term Sheet Deep Dive will be published each Monday morning until conclusion. For more information, check out or drop Rick a line at


It is probably no surprise that those putting thousands or even million dollars into a company often want some ability to “direct” that company’s affairs. Such is one of the primary rights given by a company to its investor partners when it accepts investor funds.

Dividends and liquidation preferences are the primary “economic” rights. Board representation and protective provisions (discussed later in the series) are the primary “governing” rights.

Today we’ll be discussing board representation.

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