Corporate Governance After Series A: How to Prepare for Future Rounds

Securing Series A funding is a critical milestone for startups, marking the shift from early-stage validation to scalable growth. However, with greater capital comes increased complexity, especially concerning corporate governance. Effective governance practices not only position your startup for smoother future funding rounds but also establish credibility with investors and stakeholders.

 Why Corporate Governance Matters Post-Series A

Post-Series A, your startup transitions from informal operations to structured governance. Investors now expect professional management, clear accountability, and compliance with regulatory standards along with various information and reporting rights customarily granted to them in your Series A documentation. Solid governance practices reassure investors that their investments are protected and properly managed.

Essential Steps to Strengthen Corporate Governance

 1. Formalize Your Board Structure

• Establish a formal board of directors that includes founders, investors, and ideally independent members.

• Clearly define roles, responsibilities, and voting rights to balance decision-making power.

 2. Develop Robust Corporate Policies

Establish clear policies for:

• Financial management and reporting

• Employee equity plans and stock options

• Conflict of interest and related-party transactions

• Data privacy and security

Proper documentation helps prevent conflicts, ensures regulatory compliance, and sets clear expectations.

 3. Implement Effective Financial Controls

Effective financial oversight becomes critical post-Series A:

• Adopt standardized accounting practices compliant with GAAP (Generally Accepted Accounting Principles).

• Regularly review financial statements and forecasts with your board.

• Conduct annual financial audits or reviews to increase transparency and investor confidence.

 4. Clarify Equity and Compensation Structures

Properly structured equity incentives and compensation plans align management and employee interests with company success:

• Regularly review and update option pool allocations, considering both dilution impacts and incentive needs.

• Use third-party equity management platforms like to maintain transparency and accuracy in equity administration.

 5. Prepare for Increased Investor Due Diligence

Future fundraising rounds involve rigorous due diligence:

• Maintain comprehensive and organized corporate records.

• Utilize secure digital data rooms early (Carta, DocSend, or similar tools) to manage documentation effectively.

• Anticipate potential investor questions and proactively address governance and compliance concerns.

 Conclusion

Solid corporate governance after your Series A positions your startup strategically, fostering investor trust and paving the way for smoother subsequent funding rounds. Adopting clear governance structures, robust financial controls, and transparent equity management practices ensures your company is prepared for future growth and investor scrutiny.

If you want assistance with setting up good, efficient corporate governance tailored to your company’s needs, the team at Runway Legal is here to help. Reach out to us today: hello@runwaylegal.co.

---

Disclaimer: This article is for informational purposes only and does not constitute legal advice nor create an attorney-client relationship with Runway Legal. Always consult with an attorney for advice tailored specifically to your situation.