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How To Structure Your Board: From Pre-Seed to IPO
Spencer Rascoff
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
Properly structuring your board of directors can be one of the most important factors in the overall success of a company. As we learned in my last article about why a startup needs a board, the best way to avoid early mistakes at a startup is to surround yourself with experienced people who can provide mentorship and advice.
So, what should you focus on when building a board? You’ll want to start with a solid base and grow from there. As your company shifts, pivots and gains new funding, your board should too. Take a look at how your board may shift throughout the stages of capital-raising:
Pre-Seed Stage
At the very early stages of a company, there usually isn’t even a board of directions. Once you raise any capital, even if it’s from the family and friends round, it makes sense from a governing and legal standpoint to create a board. At this point as founder, you or you and your co-founder are the board. By the time you’ve raised early capital, you should have an idea of three to five other members you may want on the board for support and advice so you can incorporate the company. Remember that whoever the lead investor is in your next stage will want a seat at the table, so be sure that seat is saved.
Series A Stage
By the Series A, you should have around three directors on your board. This again includes the co-founders and now the Series A investor. The lead investor is normally someone who is serving on several boards at the same time, so they aren’t readily available for the everyday workings of the company. They’ll primarily bring financial advice to your business as you begin to see revenue growth.
At this stage, some companies will consider adding an independent director to the board. While this isn’t completely necessary, it can be very helpful for your company’s early development.
Series B Stage
Now at the Series B stage, you should start to see growth in the company. After adding on an investor from the Series B, your board should consist of the two founders and the two venture capitalists, and perhaps your independent director
This is an important time to add an independent director to your board if you haven’t already. This fifth member should be someone who can serve as a peer operator such as another CEO or executive in a related industry, and not just another investor. For example, maybe the company needs to hire a sales team but doesn’t know where to start. It would make sense to add a CRO (chief revenue officer) who has experience in ad sales or digital media here. You’ll want someone who can bring the experience of building out a sales team in a related category or industry.
It’s also crucial to be considering the diversity of your board. Just like any team, diversity across backgrounds, experiences, skills, genders and race/ethnicity will help benefit the company’s success. Having a diverse board means you will be able to understand and target a wider audience. So far, it’s mostly been your experiences informing the company so having a different point of view could add something fresh that you would never have considered.
Series C Stage
At this point, your company has gotten a lot larger and you may be thinking about IPO readiness. You need to think carefully about what roles you’re adding to your board and who you have to fill them. Use these additions as solutions to the functional areas of your company. If you need someone who can provide more financial rigor and be a good partner to the CFO, consider a former accountant, investment banker or former CFO who would have that skill set. It’s all about fitting the puzzle pieces of your board members together.
You’ll also want to start to think about different board committees such as nominating, executive, audit or compensation committees. When developing these committees, you should aim to have two to four board committees with two to three people each. They should have different regulations and the independence required to fulfill their purpose.
Lastly, adding more independent directors is also a wise decision at this stage.
Going Public
If you’re about to go public, it’s time to look at those already on the board. It’s normal at this stage for changes and turnover to arise such as your Series A investor opting out of sitting on a public board. As things shift around, continue to consider the diversity of the board heavily.
I was recently brought onto the board of Varo Bank despite the fact that I have very little experience in fintech and banking. In addition to a wide range of backgrounds, Varo’s board also features a wide range of skills across marketing, audit, operations and more. So although I have little experience in banking, Varo was looking for someone to help scale the company and build the brand. As someone who has built a huge consumer brand and taken companies public before, I fit the bill.
The same goes for Zulily when I joined their board in 2013. At the time, most of the board consisted of people with retail experience and early venture capital investors. They didn’t have the operational experiences of CEOs who had already scaled companies and taken them public so I was brought on.
Building a board is not a one-size-fits-all process. As a board’s needs change or priorities shift, new board members can be recruited to fulfill the new needs or goals. No matter what stage of development your company is at, it’s vital that you have the experience, skills and diversity on your board to ensure that your company will continue to develop and grow.
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Spencer Rascoff
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
https://twitter.com/spencerrascoff
https://www.linkedin.com/in/spencerrascoff/
admin@dot.la
$100M in Wheels and Wings: Startups Changing How We Move
10:12 AM | March 21, 2025
🔦 Spotlight
Happy Friday, LA —
LA’s mobility scene is shifting gears — fast.
We’ve got movement on the ground and in the skies this week.
Image Source: Upway
Let’s start on two wheels. Sequoia-backed startup Upway just launched its new 30,000 square-foot flagship facility in Redondo Beach, and it’s not your average bike shop. The UpCenter, as they’re calling it, is the largest e-bike refurbishment center in California — and it’s a big bet on LA becoming a leader in urban micromobility.
If you haven’t heard of Upway yet, you will soon. The company refurbishes e-bikes at scale, with $70 million in funding and operations in both the U.S. and Europe. Their mission? Make high-quality e-bikes more affordable and accessible, especially in cities where traffic is, well… legendary.
With California’s new e-bike rebate in effect and Angelenos increasingly looking for car-free ways to move around town, Upway’s timing couldn’t be better. Whether you’re commuting, cruising the Strand, or just sick of spending half your life on the 405, a refurbished ride might be the smoothest move you make all year.
Now — from bikes to drones.
Image Source: Neros
Neros, a young LA-based startup focused on American-made autonomous drones, just announced a $35 million Series A to ramp up manufacturing. In a market long dominated by overseas players, Neros is building drone tech domestically — and it’s not just for hobbyists. Their AI-powered drones are designed to be rugged, adaptable, and mission-ready, with applications across defense, public safety, and infrastructure.
The round was led by Vy Capital, with participation from Interlagos Capital, D3, Sequoia, and Keller Rinaudo Cliffton, the CEO of Zipline. Neros’ co-founder and CEO, Soren Monroe-Anderson, summed it up well: this is about “freedom through autonomy.”
Now, on to this week’s LA venture deals, fund announcements, and acquisitions…
🤝 Venture Deals
LA Companies
- BuildOps, a Los Angeles-based provider of a unified cloud-based platform for commercial contractors, has raised a $127M Series C funding round led by Meritech Capital Partners, with participation from B Capital, Fika Ventures and others. This investment elevates BuildOps to unicorn status with a valuation of $1 billion. The company plans to use the funds to enhance product capabilities, improve customer support, and scale operations to meet the growing demand from commercial contractors nationwide. - learn more
- Proteus Space, a Los Angeles-based company specializing in rapid custom satellite bus solutions, has raised an oversubscribed $6.1M Seed-2 funding round, led by Lavrock Ventures with participation from Crosscut Ventures and others. The funds will be used to accelerate the development and deployment of MERCURY™, Proteus’ automated computational engineering system, which aims to revolutionize custom satellite bus design by significantly reducing development time and costs. - learn more
- Occuspace, a Westlake Village, California-based company specializing in occupancy intelligence technology, has secured a $6M Series A funding round led by Lewis & Clark Ventures. The company plans to use the funds to accelerate its growth across higher education, corporate, and government facilities, aiming to make space utilization data the source of truth for understanding and managing the built environment. - learn more
- Qolab, a company specializing in quantum computing hardware, has secured Series A funding from Applied Ventures, the venture capital arm of Applied Materials. The investment will be used to advance the development and scalable manufacturing of superconducting qubits, a critical component for large-scale quantum computing. As part of the collaboration, Qolab and Applied Materials have also co-authored a technical roadmap outlining strategies to scale quantum computing from hundreds to millions of qubits. - learn more
LA Venture Funds
- Wasserman participated in a $56M funding round for Carbon Arc, a New York City-based AI data utility company. Carbon Arc specializes in transforming raw data from various industries into structured, standardized intelligence suitable for AI models and business applications. The funds will be used to accelerate the growth of Carbon Arc's Insights Exchange platform, enhancing its data utility services for businesses and the AI community. - learn more
- Trousdale Ventures participated in a $24M funding round for Coreshell, a San Leandro, California-based battery technology company. Coreshell specializes in developing low-cost, high-performance silicon anodes for lithium-ion batteries, aiming to enhance energy density and reduce costs. The funds will be used to scale production at their 4 MWh manufacturing facility and to plan a new 100 MWh facility, with the goal of delivering next-generation electric vehicle batteries to global automakers this year. - learn more
- Talino Venture Studios has participated in a $2.8M seed funding round for Higala, a Philippine-based instant payment system startup. Higala aims to enhance financial inclusion by connecting rural banks, thrift banks, commercial banks, and electronic money issuers through an open payments infrastructure, thereby lowering the cost of real-time payments and reducing entry barriers. The funds will be used to expand Higala's services, including the launch of platform banking in the second quarter, enabling smaller financial institutions to offer digital payment services. - learn more
- Alexandria Venture Investments participated in a $150M Series B funding round for Latigo Biotherapeutics, a Thousand Oaks, California-based clinical-stage biotechnology company developing non-opioid pain treatments. The funds will support the advancement of Latigo's selective Nav1.8 inhibitors, currently in clinical development, and the expansion of its broader therapeutic pipeline. - learn more
- Thiel Capital led a $3.25M funding round for Pilgrim, a biotech startup focused on enhancing human performance and defending against biological threats. The funds will be used to advance its Voyager platform, which is developing cutting-edge biotechnology with potential applications ranging from creating ‘supersoldiers’ to mitigating emerging biothreats. - learn more
- Alt-Capital and WndrCo participated in an $18M seed funding round for Town, a startup specializing in small business tax solutions. Town offers an AI-powered platform that automates tasks such as document processing and data collection, providing each client with a dedicated tax advisor. The funds will be used to scale Town's services across the U.S. and expand their team. - learn more
LA Exits
- Dieta Health, a Los Angeles-based company known for its AI-powered stool imaging technology, has been acquired by Cylinder. Dieta’s clinically validated app, shown to outperform traditional patient-reported outcomes, will be integrated into Cylinder’s platform to improve digestive health diagnostics and enable earlier, more personalized treatment. As part of the deal, Dieta’s founder and key team members will join Cylinder to support ongoing development and clinical research. - learn more
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Ferret Wants To Be a ‘Knight in Shining Armor’ for Investors. Will Ethical Concerns Stand in Its Way?
07:00 AM | September 10, 2021
The way tech veteran and entrepreneur Rob Loughan explains it, he isn't in it for the money. Loughan, best known for founding Octane Software, which sold for $3.2 billion in 2001, wants to change how investors assess their personal and professional networks, despite critics' concerns.
"I want to be seen as kind of like the knight in shining armor, on the white horse, decreasing the amount of bad stuff happening in the world," said Loughan.
The 56-year-old uses an analogy to explain the benefits of his AI-enabled risk analysis tool: an open house. Several, maybe dozens, of people are walking through this person's home, where all of their valuable personal belongings are. What if they've unknowingly let a thief inside?
Ferret, he said, can spot them. The Calabasas-based company uses AI to help users identify risks within their networks or even neighborhoods. Its software scans a person's contacts and makes those individuals' backgrounds, including criminal records, available to users. It's geared toward investors and high-net worth individuals that often go in on high-stakes deals.
Ferret co-founder Rob Loughan
"The next person can pull up [to your home] in a Maserati and have a Gucci suit. They could have been bankrupt three times, and they could even be a bad person that has a bunch of fraud behind them," said Loughan. "And then there's someone like me. Looks disheveled, probably hasn't shaved in three days, my T-shirt has holes in it. [...] I might get overlooked because of the way that I presented myself."
The company was started in 2020 by Loughan and his co-founder, Al Macdonald. Macdonald is the founder and CEO of NominoData, a technology company that has been providing the financial industry with risk management data for the past 12 years.
Loughan said he started Ferret "by accident" after he invested in NominoData and Macdonald asked him for help selling the company.
"I said, 'Don't sell it'," said Loughan. "'We're gonna democratize that data, and we're going to give it to everybody instead of just the ivory tower banks and financial institution governments who seem to know everything about us, but we don't know anything about each other'."
What emerged was a technology that can put NominoData into anybody's hands. The app, which is currently in alpha testing, uses AI to determine which people are within the user's network -- be it coworkers, friends, neighbors -- and provides easy access to publicly available information on them from resources like court records and news archives. Users can also search for specific people outside of their network.
The data shown on each individual excludes misdemeanor offenses such as DUIs or marijuana possession charges, focusing instead on serious cases that are relevant to investors.
"What matters to [investors] are lawsuits, government licenses, past exit successes, fraud allegations and white collar crime," said Matt Heisie, Ferret's head of product. "Search engines and background checks are bombarded with sensational arrest records or negative news, while serious white collar crime typically stays in the shadows. Ferret changes that dynamic."
Ferret acts somewhat like a search engine to make it easier to obtain information that is publicly available but difficult to find.
Ferret can, and -- in Loughan's eyes-- likely will, be used for personal matters outside of the investment world; in fact, Ferret is currently in contact with five dating sites, looking to make their data available to users. Certain information the app collects, such as battery charges, could be important to an online dater trying to feel out a potential mate.
Privacy Experts Weigh In
Ferret announced a $4 million seed round last month, with the Australian investment firm Artesian and more than 30 angel investors participating. Despite the interest, Loughan admits every potential investor he has talked to expressed concern over the app's legality. It also raises moral questions about whether a company should be able to potentially trap someone in their past failures, even when that person may have atoned for them.
From the beginning, Loughan said Ferret has been cautious to make sure their product is legal, going so far as working with a global law firm that the company declined to name.
"We're unlikely to lose a lawsuit because we're so fastidious about doing it properly," said Loughan, who said unlike Facebook, which has come under fire for its collection of users' personal information, Ferret has no nefarious intentions and nothing to gain from misusing data.
John Davisson, senior counsel at the Electronic Privacy Information Center (EPIC), a nonprofit research organization in Washington, DC that focuses on privacy rights, pointed out two laws in particular that he said Ferret will inevitably have to comply with in order to do this legally: the Fair Credit Reporting Act and the California Consumer Privacy Act.
The laws limit what credit reporting agencies and businesses can do with the information they collect on people. Ferret maintains that the FCRA does not apply to them because they are not a credit or consumer reporting agency.
The laws also prohibit certain uses of the information the app collects, such as employing it to make hiring decisions. Ferret said that the data they provide is not the same as that of a traditional background check.
The startup said it makes users abide by terms of use that are specifically designed to make users aware of what they can and cannot do with the app.
"It's not just like, 'Do you agree to these terms and conditions?' and there's some infinitely long page that nobody reads," said Heisie. "They have to affirmatively agree to those individual points before they get into the application. It's very clear, too, that violation of the terms and conditions will just result in suspension of their use of the application for them immediately."
Jay Stanley, a senior policy analyst with the American Civil Liberties Union's "Speech, Privacy and Technology" program said that in the past, "practical obscurity" of personal information -- the concept that public information is not always easily accessible -- has indirectly protected privacy, but much of that has gone away in the digital age.
"While you undoubtedly have a First Amendment right to talk about what people have done in the past and what the records are about people, by systematizing it you're also making it harder for people to escape their past and start over," said Stanley.
Photo by Ben Rosett on Unsplash
'Not Trying to Point Fingers'
Ferret said it makes every effort to maintain privacy and fairness for those whose backgrounds are collected in its app.
Details of its artificial intelligence system are secret, but the company said it is planning to publish a white paper that lays out their AI framework and gives a statement of ethics for all to scrutinize.
What makes Ferret different, Heisie said, is that it's not a catch-all record scraper. Instead, it targets information relevant to the businesspeople who use it.
"It starts with what goes in," said Heisie. "It starts with trying to identify what actually is relevant from a business context and deprioritizing what's not, and using that as the beginning of the algorithms."
But the algorithms that make up artificial intelligence can be tainted by the developers' bias, influencing their output. Electronic Privacy Information Center's Davisson said he is not convinced that AI is at the point yet where it can perform in an unbiased way.
"These tools frequently develop and encode gender biases, racial biases, ethnic biases," said Davisson. "And especially something that's trying to make reputational judgments based on news coverage, which is a spectrum of sources that is obviously susceptible to human bias. Those same biases can creep into what they are claiming is an unbiased system."
As an example of this in the works, Davisson cited a recruitment AI system formerly used by Amazon that was proven a few years ago to be strongly biased against female candidates, filtering out resumes that included the word "women's" and listed certain female-only colleges.
Loughan is confident in his team's ability to make Ferret a service that is lawful and free of bias, but he is also prepared for pushback, possibly even lawsuits.
"I want to be seen as someone who's trying to make the world a better place, not trying to point fingers at people and say they're bad, because we don't do that," Loughan said. "We just show the data that's publicly available, and then you come to your own conclusion about the person."
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Caitlin Cook
Caitlin Cook is an editorial intern at dot.LA, currently earning her master's degree in mass communication from California State University, Northridge. A devoted multimedia journalist with an interest in both tech and entertainment, Cook also works as a reporter and production assistant for MUSE TV. She got her Bachelor of Fine Arts in Filmmaking from University of North Carolina School of the Arts.
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