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0 pointsPaulDavisThe1st2y ago0 comments

> Usually they just vote their friends on

You actually think that for-profit corporate boards are significantly different, especially in the startup/early IPO phase?

0 comments

kolinko2y ago

From Tom Perkins’s biography - after serving on boards both big private companies and non-profjts, he said that non profits were much worse. His theory was that with no money on the stake it’s all about egos, and they cause weird situations to happen.

Also, I worked in startups and my ex-gf in various nonprofits, and the amount of drama she saw was way higher than in the commercial world

dougmwne2y ago

Sure, the investors own the company and the board answers to them. Nonprofits are significantly disconnected from their own financial incentives. I have witnessed it at every nonprofit I have worked for.

foota2y ago

I mean.. the OpenAI foundation is literally not motivated by profit. I guess the main question here is how was the board chosen, and why didn't Sam much sure they were friendly to them.

adastra222y ago

In the early stage the investor does not own the startup. 20-30% stake would be typical. Hence why a Series A investor usually demands a board seat and special considerations.

manquer2y ago

Investor here is not someone who puts cash in professionally without running the company. Investor here means whoever owns the stock. There is always an investor in a company even if its just the founder owning 100% stock.

The board reports to the shareholders and the management reports to the board.

In early stage companies it is possible and likely that all three are the same person, that doesn't change the different fiduciary responsibilities for each role they play.

adastra222y ago

The word you are looking for is "shareholder."

1 more reply

cthalupa2y ago

> Sure, the investors own the company and the board answers to them.

Huh? Plenty of startups in the stage being referenced are still majority owned by the founders.

jdminhbg2y ago

Even if I only owned 1% of Google I’d be very motivated to vote in the best financial interests of the company. If I owned 0% not so much.

crop_rotation2y ago

But those are people who have some skin in the game right? And shareholders can change the board structure right?

PaulDavisThe1stOP2y ago

I was at amzn when jeff formed the first board. No skin in the game, and no shareholders with any votes. I gather this is pretty typical.

crop_rotation2y ago

But Jeff was the shareholder and those were his nominees right? Not to mention he was mostly able to pick the board as needed. In for profit corporation there is a clear ultimate ownership in shareholders. No such thing here.

PaulDavisThe1stOP2y ago

The claim was that non-profits "just put their friends on the board". No difference.

j / k navigate · click thread line to collapse

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kolinko2y ago

Also, I worked in startups and my ex-gf in various nonprofits, and the amount of drama she saw was way higher than in the commercial world

dougmwne2y ago

foota2y ago

I mean.. the OpenAI foundation is literally not motivated by profit. I guess the main question here is how was the board chosen, and why didn't Sam much sure they were friendly to them.

adastra222y ago

In the early stage the investor does not own the startup. 20-30% stake would be typical. Hence why a Series A investor usually demands a board seat and special considerations.

manquer2y ago

The board reports to the shareholders and the management reports to the board.

In early stage companies it is possible and likely that all three are the same person, that doesn't change the different fiduciary responsibilities for each role they play.

adastra222y ago

The word you are looking for is "shareholder."

1 more reply

cthalupa2y ago

> Sure, the investors own the company and the board answers to them.

Huh? Plenty of startups in the stage being referenced are still majority owned by the founders.

jdminhbg2y ago

Even if I only owned 1% of Google I’d be very motivated to vote in the best financial interests of the company. If I owned 0% not so much.

crop_rotation2y ago

But those are people who have some skin in the game right? And shareholders can change the board structure right?

PaulDavisThe1stOP2y ago

I was at amzn when jeff formed the first board. No skin in the game, and no shareholders with any votes. I gather this is pretty typical.

crop_rotation2y ago

PaulDavisThe1stOP2y ago

The claim was that non-profits "just put their friends on the board". No difference.

j / k navigate · click thread line to collapse