OpenAI tumult, FTX blowup help bring VC governance back in vogue
Venture capitalists are once again insisting on board seats at their portfolio companies after years of relaxing standards.
FTX‘s implosion and OpenAI‘s recent saga—which caught investors by surprise when OpenAI CEO Sam Altman was suddenly ousted without them being notified—reminded VCs and their limited partners why governance matters.
“Every major investor is now asking for a board seat, versus 2021 when you had maybe 50% [requesting a seat],” said Yash Patel, a general partner at Telstra Ventures, which had a small stake in FTX. “That change is partly driven by LPs who are not happy with what happened in 2021 and its ramifications.”