What you'll learn

• 1 (00:09) **Episode Introduction & Topic Setup** - Jason introduces the "Startup Legal Basics" series with Becky DuGras from Wilson Sonsini and sets up the episode's focus on board composition, observer rights, and removal.
• 2 (04:42) **When to Start a Board** - Becky advises against adding five board members early, as founders lose control; board actions can be done by written consent initially.
• 3 (07:31) **Board Structure Evolution** - The board typically moves from founder-controlled to balanced (common vs. preferred) around Series B, often adding an independent director.
• 4 (10:22) **Independent Director Compensation** - Independent directors at startups typically receive equity (0.5-1% vesting over 2-4 years), not cash, unlike public company directors.
• 5 (13:07) **Board Member vs. Board Observer** - A critical distinction: directors have voting power and fiduciary duties; observers have neither, only the right to attend and receive materials.
• 6 (16:28) **The Observer's Practical Value** - Jason shares his observer strategy: focus on whether the company is in trouble or has a great opportunity, and get early notice of sales or financings.
• 7 (17:56) **Removing a Director: Legal Reality** - Becky explains that preferred directors are elected only by preferred stockholders, and common holders cannot vote to remove them.

+ Full timestamped outline available in the app