The board voting formula is a practical contrast: before cash-flow positive, the investors sustaining the company can effectively dominate; afterward, influence returns to individual board votes. section 19.2
The formula highlights two different operating realities:
- Pre-cash-flow positive: “one dollar, one vote.” Investor funding can outweigh a formal board majority when rejecting a critical resolution threatens the next round. section 19.2
- Post-cash-flow positive: “one person, one vote.” More financing options reduce dependence on threatening investors and increase company control. section 19.2
A resolution under pressure
If sustaining investors oppose a resolution and threaten to withhold the next round, proceeding may be too risky unless replacement funding is certain. section 19.2
