The board duty question only gets sharp when the cap table forces it. The difference between common and preferred is treated as a finance problem in too many rooms, when the right framing was always fiduciary. Independent directors get sidelined the moment liquidation preferences enter the conversation, and most of them never push back hard enough. Delaware sees this. The investors who structured the preference rarely do.
Yes — governance gets real when the cap table stops being a spreadsheet. You can usually see the board’s true constituency in the first draft of a down-round process.
Solid piece.
Thanks Louis!
The board duty question only gets sharp when the cap table forces it. The difference between common and preferred is treated as a finance problem in too many rooms, when the right framing was always fiduciary. Independent directors get sidelined the moment liquidation preferences enter the conversation, and most of them never push back hard enough. Delaware sees this. The investors who structured the preference rarely do.
Yes — governance gets real when the cap table stops being a spreadsheet. You can usually see the board’s true constituency in the first draft of a down-round process.