How much equity do independent board members of a startup get?With all the drama around the OpenAI board last week, many have asked me about the compensation of an independent board member.In the past, accessing information like this was a significant challenge. The information arbitrage was particularly pronounced when I was younger. Obtaining reliable data on compensation at all levels was a notably difficult task.But now, guess what?It’s all available in the public domain.We can look at data from Carta, a software platform that startups use to manage their cap tables. Looking at this dataset gives one a good idea of the average equity compensation for independent board members.At the Seed stage, they receive:0.78% on averageAt the Series A stage, they receive:0.53% on averageAt the Series B stage, they receive:0.39% on averageKeep in mind that it’s highly variable on the experience and reputation of the board member. It also depends on the value they bring. You can see in the chart that at the seed stage, some board members get a full percentage point, while others receive roughly a third of a percent.Some independent board members also receive cash compensation, which can vary significantly. This payment might be a few thousand dollars per meeting or an annual retainer. In some instances, board members' bonuses are linked to the company’s performance, though this practice is less common in early-stage startups. Many board members are also provided with a travel stipend for attending in-person meetings, but with video conferencing this happening less and less.While serving on a board may seem prestigious, it's vital to recognize the fundamental role independent directors play in corporate governance.Unlike internal directors, who are part of the company's management or investor group, independent board members are not company employees and don't have any material or financial relationship with it other than their board membership.In the ideal scenario, this independence helps ensure impartiality and objectivity. But as we saw with OpenAI, it can also cause dysfunction if their vision and mission are not aligned with that of the CEO.Thanks to Peter Walker for publishing this original data.
Appreciate the share, Arjun. Glad to be making the information a little less opaque these days
Co-Founder OpenEnvoy (Riot, RRE) | 2023 Gartner Cool Vendor AI for Finance. Investor in 100+ startups.
5mo
I feel bad for founders who had to have an independent board member pre-A.
You're way better off taking the job at Series B than Pre-Seed if the drop off is only ~50% in amount and the likelihood of it being worth anything is probably increased ~1000%!
Founder & CEO | LasaAI | AI-Powered Investment Copilot | Expert AI Whisperer | I help Investors and Investment Management firms boost financial results.
6mo
Thank you! I was looking for this info. Timely post for me.
Very useful information, indeed! Thanks for posting this, Arjun!
Head of M12 Marketing & Communications | Driving Venture Growth
6mo
Great insight, Arjun! Very useful.
To view or add a comment, sign in
More Relevant Posts
-
bluesheets, an AI-powered financial data startup based in Singapore, announced Tuesday it raised $6.5 million in a Series A funding round led by fintech-focused VC Illuminate Financial, bringing the four-year-old startup’s total funding to $12.5 million. Participating in the round were returning investors Insignia Ventures Partners, Antler Elevate–the emerging growth fund of VC firm Antler–and 1982 Ventures. The Series A values the startup at $30 million.“The opportunity with large language models is so vast that I don't think people understand yet what this can lead to,” says Christian Schneider, CEO and cofounder of Bluesheets, in a video interview. “A lot of these automation projects that we're implementing right now, they promise about 90% automation on a workflow that was previously very manual…I think it can be fully automated, close to 100%.” Clare Leighton, Luca Z., and Paulo J 👏 #aibusiness #data #automation #saas #southeastasia
Singapore Financial Data Startup Raises $6.5 Million Series A To Double Down On AI
forbes.com
To view or add a comment, sign in
-
In a recent article by NAB, it highlights the growing trend of moving away from traditional hourly billing in professional services firms and adopting value-based pricing models. Here are some of the key insights: ✨ Embracing Value-Based Pricing: By focusing on delivering tangible and quantifiable value to their clients, businesses can differentiate themselves in the market and foster strong client relationships.✨Leveraging AI and Automation: As AI and automation technologies free up time for businesses, they can utilise that capacity to provide additional high-value services beyond routine tasks. ✨Future-Proofing the Business: Adopting value-based pricing can help businesses future-proof their business by staying competitive in an evolving market. It allows them to adapt to changing client needs and expectations, ensuring they remain relevant and resilient in the face of technological advancements.Interested in how you can implement this in your business? We're hosting a panel and networking event on this topic on 13 July from 6-8pm.RSVP now: https://lnkd.in/gSzssAsi#valuebasedpricing #ai #automation #startups #networking
How to Grow your Startup with Value Pricing | Panel & Networking Event | Humanitix
events.humanitix.com
To view or add a comment, sign in
-
-
Exciting to see the participants of the 2024 Startup Accelerator program announced! Each company is leveraging #AI to create efficiencies and drive value for the accounting and finance profession. #StartupAccelerator24🔗See more. https://ow.ly/upN430sAL3j
AICPA and CPA.com Announce 2024 Startup Accelerator Cohort with Artificial Intelligence Focus
cpa.com
To view or add a comment, sign in
-
Software / Consulting / Staff Augmentation / CTO at 1000ideas / Architect at AGH University
Our future #SaaS #founders will navigate a different #business landscape 🌐John Kennedy and Will M. are suggesting a paradigm shift in the startup world - where software companies are moving from a fixed cost model to a variable one. This has implications for founders building and growing their tech companies.Key insights: 🔑 • Founders are now leveraging variable costs to establish high-margin business models and gain higher control over their companies' futures. • The mature SaaS ecosystem lets companies selectively automate, delegate, or consume services as needed, rather than commit significant fixed costs. • Generative AI promises to usher in a new era in software, where it's not just structures and strategies that need reconsidering, but the cost models as well.By leveraging AI and shifting away from a fixed cost model, will the future's SaaS founders build more resilient, flexible and thriving companies?💡💼Craving more insights? Dive into the full article and join the discourse of future of SaaS. #SaaS #BusinessModels #AI #StartupStrategy***If you found what I wrote interesting, give 👍 and press 🔔 on my profile to receive a notification about my next posts.
Asset-light Software Businesses: The New Paradigm for Startups
every.to
To view or add a comment, sign in
-
Co-founder @ Counts | CA | IIMA | Guiding startups in converting complex accounting data to actionable insights|
📢 Alert for Investors: Beware from financial irregularities from startups 🚀 Recently health tech startup Mojocare’s founders confessed to investors about exaggerating revenue. Relying solely on the spreadsheets of monthly, quarterly, or yearly financial statements are not enough to protect your investments. 🔎That's why it's time to consider alternative approaches to monitor startups.📊 By leveraging key metrics obtained automatically from accounting software with the help of reporting platforms, you can gain a competitive edge and protect your investments. Here's how:1️⃣ Real-Time Metrics: Say goodbye to outdated information! With reporting platforms integrated directly with accounting software, you gain access to up-to-date key metrics. Stay on top of a startup's financial health and identify early warning signs promptly. ⌛2️⃣ Granular Insights: High-level financial statements might not reveal underlying issues. But with detailed and specific metrics, you can dig deeper and pinpoint potential areas of concern. 🎯3️⃣ Interactive Reporting Platforms: Why limit yourself to one-way communication? Reporting platforms allow direct engagement with startups, promoting transparency and accountability. 💬 Ask real-time questions, obtain clarifications, and make more informed decisions.That's why at 'Counts', we're developing a platform that empowers investors like you. 🚀 Our aim is to provide a space where you can gain valuable insights on financial metrics of startups and seamlessly communicate with them, clearing any doubts or concerns you may have. 📈💡Visit our website at counts.ac to learn more about our platform and be part of the early access program. Together, we can revolutionize the way investors monitor startups and make smarter investment choices. 💪Join us in fostering transparency, accountability, and maximizing the potential of startup investments. 🌟Share your thoughts and stay tuned for updates as we bring Counts to life. Together, let's unlock the full potential of startup investments! 🚀Pic Credit: Inc42 Media#StartupInvesting #FinancialIrregularities #InvestmentStrategy #TransparencyMatters #reporting #analytics #artificialintelligence #dataanalytics #startup #founders
To view or add a comment, sign in
-
-
🎲 OpenAI's Power Struggle: A Plot to Reinstate CEO Sam Altman 🎲》The Unexpected U-Turn: Investors Push for Sam Altman's Return to OpenAI.1. OpenAI's Boardroom Surprise: OpenAI's board of directors recently fired CEO Sam Altman, sparking shock and a counter-coup plan from investors to restore him. 🚫2. Potential Counter-Coup: Venture capital firms are considering working with Microsoft and OpenAI's senior employees to reinstate Altman. However, the feasibility of this plan is uncertain. 🤔3. The Plan: The strategy to restore Altman involves making OpenAI's new management accept their situation was untenable through mass revolt by senior researchers, withheld cloud computing credits from Microsoft, and a potential lawsuit from investors. 📝4. Possible Consequences: If the plan is successful, Altman and OpenAI ex-president Greg Brockman were planning to raise capital for a new startup. If not, they would proceed with their new startup, Newco. 💰5. Microsoft's Involvement: Microsoft, OpenAI’s key partner, is a crucial player in any attempted reinstatement. Microsoft's CEO Satya Nadella was surprised and “furious” by the ouster. 🎭6. The Information Report: The Information reported that Altman was already meeting with investors to raise funds for a new project. Both options remained possible. 📣7. OpenAI's Board Discussions: OpenAI’s board was in discussions to bring back Altman. It was unclear if these discussions were the immediate result of the investor pressure. 🗣️8. Investor Blindsided by Altman's Firing: Forbes reported how investors had been blindsided by Altman’s firing by OpenAI’s board of directors. 🚫For more insights on product development and startup growth, follow me and hit the bell 🔔P.S Did you find this insightful? ♻️ Share it with your network and let's continue to learn, grow, and thrive together................................#OpenAIPowerStruggle #CEOReinstatement #VentureCapital #AIIndustry #productdevelopment
OpenAI Investors Plot Last-Minute Push With Microsoft To Reinstate Sam Altman As CEO
forbes.com
To view or add a comment, sign in
-
For this week’s #InvestorSpotlight, we’re profiling Andreessen Horowitz. 📣🔍Focus Areas: Andreessen Horowitz or "a16z" is a venture capital firm dedicated to supporting visionary entrepreneurs who are shaping the future through #technology. The firm has a stage-agnostic approach, investing in technology companies across various stages, spanning the consumer, enterprise, #bio / #healthcare, #crypto, #fintech, and #gaming sectors. A16z manages $35 billion in assets distributed across numerous funds.🌐Headquarters: Headquartered in Menlo Park, California, a16z has offices in San Francisco, New York, and London as well.👥Founding Visionary: A16z was founded by Marc Andreessen and Ben Horowitz in 2009. Marc Andreessen is a Co-founder and General Partner at a16z. Before establishing a16z, Marc played pivotal roles in the creation of the groundbreaking Mosaic internet browser and co-founded Netscape, eventually acquired by AOL for $4.2 billion. Additionally, he co-founded Loudcloud, later known as Opsware, which was sold to Hewlett-Packard for $1.6 billion. Marc also served on the board of Hewlett-Packard from 2008 to 2018.Ben Horowitz is also a Co-founder and General Partner at a16z. Before a16z, he co-founded and served as CEO of Opsware (formerly Loudcloud), a company acquired by Hewlett-Packard for $1.6 billion in 2007. Following the acquisition, he assumed the role of vice president and general manager of Business Technology Optimization for Software at HP. Prior to this, Ben held significant positions at America Online and Netscape Communications, where he managed product divisions and held leadership roles.📈Portfolio Companies: Its portfolio includes Instacart, OpenGov Inc., Anduril Industries, Carta, ClickUp, Databricks, and more.📰Recent Deals:- Applied Intuition, a startup in the autonomous vehicle sector, achieves a valuation of $6 billion following a $250 million Series E funding by Andreessen Horowitz and other investors.- Kaedim secures a $15 million Series A financing round with Andreessen Horowitz as the lead investor.- Milu Health secures $4.8 million in seed funding, with Andreessen Horowitz leading the investment round.💰Fund News: According to Reuters, Andreessen Horowitz is on the verge of raising nearly $7 billion across multiple funds with a sector-specific strategy. The fundraising initiative, which is said to conclude in early April, encompasses a fourth growth fund along with funds tailored for gaming, enterprise infrastructure, applications, and American Dynamism, which concentrates on defense and manufacturing tech. A16z highlights the significance of #AI in its early-stage funds. Despite a slight reduction from its prior target, the firm's fundraising shows its resilience amid a lagging venture capital market.Learn more about the firm below.#privatemarket #secondaries #venturecapital #privatecredit #privateequity
Andreessen Horowitz | Software Is Eating the World
https://a16z.com
To view or add a comment, sign in
-
✅ SeedMetrics Blog is up & running - tons of content coming soon!As startups are increasingly shifting focus to profitability, high performing founders are no longer content with a 45-day lag to get eyes on a static business performance report. Instead, they rely on real-time insights to make data-driven decisions quickly and efficiently. Here are six ways startups can use BI to be more profitable.
6 Use Cases of Business Intelligence for every Startup — SeedMetrics
seedmetrics.io
To view or add a comment, sign in
-
Our latest Why We Invested blog post is about Truewind, a finance and accounting solution built by founders for founders, incorporating AI to meet the needs of startups."Alex wanted to build a reporting technology that would help more startups survive the early-stage gauntlet and give founders the reporting infrastructure to make financial data more transparent, accessible, and shareable for startups. So he built Truewind."https://lnkd.in/gwhvuiJi
Truewind: Why We Invested in This Finance-for-Founders Solution
medium.com
To view or add a comment, sign in
