Board Consent Approving Equity Financing
For Informational Purposes Only
A unanimous written consent of the board of directors approving a Series Seed or Series A preferred stock financing. Covers approval of the financing, charter amendment, transaction documents, 409A valuation, option pool expansion, and officer authorization.
What This Document Does
The Board Consent is a unanimous written consent in lieu of a meeting, authorized under DGCL Section 141(f). It documents the board of directors’ formal approval of all actions required to close an equity financing—authorizing the issuance and sale of preferred stock, adopting the amended certificate of incorporation, approving the suite of transaction documents, ratifying the 409A valuation, expanding the option pool, and delegating execution authority to the company’s officers. This is the critical corporate governance document that establishes the board’s authorization for the entire transaction.
Why This Is Essential
Without board approval, the issuance of securities is unauthorized and potentially voidable. The consent provides the legal foundation for every document signed at closing.
Documents that the board reviewed the terms, considered the valuation, and determined the financing to be in the best interests of the company—establishing the fiduciary duty record.
Ratifies the fair market value determination for common stock, which anchors the exercise price for all stock options. A properly documented 409A valuation is critical for tax compliance.
Investors typically require delivery of the executed board consent as a condition to closing. Without it, the financing cannot proceed.
Key Resolutions Explained
Approval of Financing
Authorizes the issuance and sale of a specified number of shares of Series Preferred Stock at the agreed price per share, for aggregate proceeds up to the round size. The resolution specifies both the maximum number of shares and the maximum aggregate proceeds to give officers flexibility to accommodate minor adjustments at closing without requiring a new consent.
Charter Amendment
Approves and adopts the Amended and Restated Certificate of Incorporation, which designates the new series of preferred stock and authorizes the total share capital. The board directs the officers to file the restated certificate with the Delaware Secretary of State prior to or simultaneously with closing.
Transaction Documents
Approves the forms of the Stock Purchase Agreement, Investors’ Rights Agreement, Right of First Refusal and Co-Sale Agreement, Voting Agreement, and Management Rights Letter (if applicable). Each document is referenced by name and attached as an exhibit or circulated to directors in advance. The resolution authorizes officers to execute final versions with such non-material changes as they deem appropriate.
409A Valuation
Ratifies the fair market value of common stock as determined by an independent valuation firm. This valuation sets the floor for stock option exercise prices. The board affirms that the valuation was conducted in accordance with Section 409A of the Internal Revenue Code and the applicable Treasury Regulations, and that the FMV represents the board’s good-faith determination based on all available information.
Option Pool Expansion
Increases the shares reserved for issuance under the equity incentive plan to the post-financing pool size. The option pool is typically sized as a percentage of post-money fully-diluted capitalization (commonly 10-20%) and is negotiated as part of the financing terms because it affects pre-money valuation dilution.
Officer Authority & Omnibus
Authorizes the CEO and any other officer to execute all transaction documents, file the charter amendment, issue stock certificates, and take any further actions necessary to carry out the intent of the resolutions. The omnibus resolution is a standard catch-all ensuring officers have authority to handle ministerial matters without requiring a supplemental consent.
How to Use This Template
This template is designed for a Delaware corporation closing a Series Seed or Series A preferred stock financing. Complete all bracketed placeholders including company name, series designation, share count, price per share, aggregate proceeds, 409A valuation details, and option pool expansion. Circulate drafts of all transaction documents to the board before requesting signatures on the consent. All directors must sign for the consent to be effective under DGCL Section 141(f)—if any director is unavailable or has a conflict, a formal board meeting with proper notice and quorum may be required instead. File the executed consent in the company’s corporate minute book alongside the signed transaction documents. Consult with qualified legal counsel before execution.
Disclaimer: This template is provided for informational and educational purposes only and does not constitute legal advice. Montague Law recommends consulting with qualified legal counsel before using this or any legal document. Use of this template does not create an attorney-client relationship.