Can Founders Maintain Control Post-Money?

Most founders want to hang on to as much equity and control as they can throughout the startup process. But how much control can a founder expect to retain after raising a Series A round of funding? In the past, that answer may have been different than it is today.

The funding game is changing, and with startups requiring less capital to get started, the power is starting to shift from investor to entrepreneur.

In a dozen companies we’ve funded, the founders still had a majority of the board seats after the series A round.

I feel like we’re at a tipping point here. A lot of VCs still act as if founders retaining board control after a series A is unheard-of. A lot of them try to make you feel bad if you even ask—as if you’re a noob or a control freak for wanting such a thing. But the founders I heard from aren’t noobs or control freaks. Or if they are, they are, like Mark Zuckerberg, the kind of noobs and control freaks VCs should be trying to fund more of.

Founders retaining control after a series A is clearly heard-of. And barring financial catastrophe, I think in the coming year it will become the norm. - Paul Graham, Y Combinator

Source: Paul Graham

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