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...teed return on their investments, at the expense of the early investors, company founders, or employees who were either washed out of left with significantly reduced equity stakes. For a venture capitalist there is a tremendous pressure to act to protect your own interests which may be at odds with the interests of the company’s shareholders. Here is who controls the Board: Founders and Management: Seed Rounds 60% Latest Rounds 3.4% All Investors 6.7% 18.6% Current Round Investors 6.7% 52.5% Balanced 26.7% 25.4% A study found that while venture capitalists typically share seats on the boards of companies and outside directors in the early life of the company with third and later rounds “were the rule.” Aamer Latif, an entrepreneur from Silicon Valley, filed a complaint against the venture backers of a company he co-founded, Nishan Systems Inc. His allegations included a breach of fiduciary duty by a board of venture insiders who topped of three funding rounds with a late-stage bridge loan prior to the company’s sale. That financing insured them a larger return at the expense of employees he maintains. The venture capitalists in these allegations call them “baseless.” they claim to have acted ethically, legally and in the company’s best interests of a struggling company and common sh...