What does it mean to take equity and get a board seat?











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In this article from Forbes:




500 Startups recently took in equity from Abu Dhabi Financial Group, giving the firm one of its only two board seats.




What exactly does it mean to take in equity from a company and to get a board seat? What exactly happened? I am trying to understand from financial/business point of view










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  • 10




    For anyone else who, like me, is confused at first, 500 Startups is the name of a venture capital firm.
    – Ben Miller
    9 hours ago















up vote
2
down vote

favorite












In this article from Forbes:




500 Startups recently took in equity from Abu Dhabi Financial Group, giving the firm one of its only two board seats.




What exactly does it mean to take in equity from a company and to get a board seat? What exactly happened? I am trying to understand from financial/business point of view










share|improve this question









New contributor




Phaser is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.
















  • 10




    For anyone else who, like me, is confused at first, 500 Startups is the name of a venture capital firm.
    – Ben Miller
    9 hours ago













up vote
2
down vote

favorite









up vote
2
down vote

favorite











In this article from Forbes:




500 Startups recently took in equity from Abu Dhabi Financial Group, giving the firm one of its only two board seats.




What exactly does it mean to take in equity from a company and to get a board seat? What exactly happened? I am trying to understand from financial/business point of view










share|improve this question









New contributor




Phaser is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.











In this article from Forbes:




500 Startups recently took in equity from Abu Dhabi Financial Group, giving the firm one of its only two board seats.




What exactly does it mean to take in equity from a company and to get a board seat? What exactly happened? I am trying to understand from financial/business point of view







business equity board-of-directors






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Phaser is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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share|improve this question









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Phaser is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
Check out our Code of Conduct.









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edited 29 mins ago









muru

1196




1196






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asked 9 hours ago









Phaser

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132




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Phaser is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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Phaser is a new contributor to this site. Take care in asking for clarification, commenting, and answering.
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Check out our Code of Conduct.








  • 10




    For anyone else who, like me, is confused at first, 500 Startups is the name of a venture capital firm.
    – Ben Miller
    9 hours ago














  • 10




    For anyone else who, like me, is confused at first, 500 Startups is the name of a venture capital firm.
    – Ben Miller
    9 hours ago








10




10




For anyone else who, like me, is confused at first, 500 Startups is the name of a venture capital firm.
– Ben Miller
9 hours ago




For anyone else who, like me, is confused at first, 500 Startups is the name of a venture capital firm.
– Ben Miller
9 hours ago










2 Answers
2






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votes

















up vote
4
down vote



accepted










“Taking in equity” means selling shares, generally newly-issued shares. “Getting a board seat” means that you can nominate a person of your choice to be one of the board directors of the company. So 500Startups sold shares to Abu Dhabi Financial Group, who now have a representative on the board of directors.






share|improve this answer





















  • If I understand correctly, Abu Dhabi Fin Group made an investment in 500Startups, and in return they got to appoint someone on one of the two board seats of 500Startups. Am I right ?
    – Phaser
    8 hours ago












  • @Phaser Yes, that’s correct.
    – Mike Scott
    8 hours ago


















up vote
3
down vote













If a person/company makes a large investment in a company they can require as a term of that investment that they be given a seat on the board of directors. This gives them the inside information they desire, and the ability to participate in corporate decisions.



The investment must be large or strategic in order to be given a seat on the board.






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    2 Answers
    2






    active

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    2 Answers
    2






    active

    oldest

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    votes






    active

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    up vote
    4
    down vote



    accepted










    “Taking in equity” means selling shares, generally newly-issued shares. “Getting a board seat” means that you can nominate a person of your choice to be one of the board directors of the company. So 500Startups sold shares to Abu Dhabi Financial Group, who now have a representative on the board of directors.






    share|improve this answer





















    • If I understand correctly, Abu Dhabi Fin Group made an investment in 500Startups, and in return they got to appoint someone on one of the two board seats of 500Startups. Am I right ?
      – Phaser
      8 hours ago












    • @Phaser Yes, that’s correct.
      – Mike Scott
      8 hours ago















    up vote
    4
    down vote



    accepted










    “Taking in equity” means selling shares, generally newly-issued shares. “Getting a board seat” means that you can nominate a person of your choice to be one of the board directors of the company. So 500Startups sold shares to Abu Dhabi Financial Group, who now have a representative on the board of directors.






    share|improve this answer





















    • If I understand correctly, Abu Dhabi Fin Group made an investment in 500Startups, and in return they got to appoint someone on one of the two board seats of 500Startups. Am I right ?
      – Phaser
      8 hours ago












    • @Phaser Yes, that’s correct.
      – Mike Scott
      8 hours ago













    up vote
    4
    down vote



    accepted







    up vote
    4
    down vote



    accepted






    “Taking in equity” means selling shares, generally newly-issued shares. “Getting a board seat” means that you can nominate a person of your choice to be one of the board directors of the company. So 500Startups sold shares to Abu Dhabi Financial Group, who now have a representative on the board of directors.






    share|improve this answer












    “Taking in equity” means selling shares, generally newly-issued shares. “Getting a board seat” means that you can nominate a person of your choice to be one of the board directors of the company. So 500Startups sold shares to Abu Dhabi Financial Group, who now have a representative on the board of directors.







    share|improve this answer












    share|improve this answer



    share|improve this answer










    answered 9 hours ago









    Mike Scott

    13.1k3647




    13.1k3647












    • If I understand correctly, Abu Dhabi Fin Group made an investment in 500Startups, and in return they got to appoint someone on one of the two board seats of 500Startups. Am I right ?
      – Phaser
      8 hours ago












    • @Phaser Yes, that’s correct.
      – Mike Scott
      8 hours ago


















    • If I understand correctly, Abu Dhabi Fin Group made an investment in 500Startups, and in return they got to appoint someone on one of the two board seats of 500Startups. Am I right ?
      – Phaser
      8 hours ago












    • @Phaser Yes, that’s correct.
      – Mike Scott
      8 hours ago
















    If I understand correctly, Abu Dhabi Fin Group made an investment in 500Startups, and in return they got to appoint someone on one of the two board seats of 500Startups. Am I right ?
    – Phaser
    8 hours ago






    If I understand correctly, Abu Dhabi Fin Group made an investment in 500Startups, and in return they got to appoint someone on one of the two board seats of 500Startups. Am I right ?
    – Phaser
    8 hours ago














    @Phaser Yes, that’s correct.
    – Mike Scott
    8 hours ago




    @Phaser Yes, that’s correct.
    – Mike Scott
    8 hours ago












    up vote
    3
    down vote













    If a person/company makes a large investment in a company they can require as a term of that investment that they be given a seat on the board of directors. This gives them the inside information they desire, and the ability to participate in corporate decisions.



    The investment must be large or strategic in order to be given a seat on the board.






    share|improve this answer

























      up vote
      3
      down vote













      If a person/company makes a large investment in a company they can require as a term of that investment that they be given a seat on the board of directors. This gives them the inside information they desire, and the ability to participate in corporate decisions.



      The investment must be large or strategic in order to be given a seat on the board.






      share|improve this answer























        up vote
        3
        down vote










        up vote
        3
        down vote









        If a person/company makes a large investment in a company they can require as a term of that investment that they be given a seat on the board of directors. This gives them the inside information they desire, and the ability to participate in corporate decisions.



        The investment must be large or strategic in order to be given a seat on the board.






        share|improve this answer












        If a person/company makes a large investment in a company they can require as a term of that investment that they be given a seat on the board of directors. This gives them the inside information they desire, and the ability to participate in corporate decisions.



        The investment must be large or strategic in order to be given a seat on the board.







        share|improve this answer












        share|improve this answer



        share|improve this answer










        answered 9 hours ago









        mhoran_psprep

        64.7k888167




        64.7k888167






















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