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

  • 22
    For anyone else who, like me, is confused at first, 500 Startups is the name of a venture capital firm.
    – Ben Miller
    Commented Dec 11, 2018 at 20:10

2 Answers 2


“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.

  • 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
    Commented Dec 11, 2018 at 21:06
  • @Phaser Yes, that’s correct.
    – Mike Scott
    Commented Dec 11, 2018 at 21:10
  • 1
    So in this instance, the "board of directors" is two people: one from Abu Dhabi Fin Group and one other.
    – TripeHound
    Commented Dec 12, 2018 at 7:51
  • @TripeHound I suspect that they mean there are two board seats reserved for external investors, and Abu Dhabi Fin Group have got one of those. There are presumably also some executive directors.
    – Mike Scott
    Commented Dec 12, 2018 at 10:13

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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