Paul - I agree with you. No VC backed company should be surprised, but in my experience, many are. I believe most entrepreneurs don't really understand share classes and the practical implications of many terms in their investment agreements. Others may understand the terms but are surprised by how they are applied. I applaud your outstanding work in helping to maket this clear to entrepreneurs everywhere. Keep up the great work!
On the number of directors, please keep in mind that this is at the time the angels have invested, so the company is reasonably far along. You must have an even number, so the choices are 3 or 5. Three is workable, but does not provide much diversity. If you can recruit good directors, five provides much better opportunty for CEO mentoring. Basil from www.AngelBlog.net
Startup funding is NOT easy. There are several reasons why it’s so difficult: supply, demand, availability of information, fees and experience. There’s a post on my blog that explains these reasons at: http://www.AngelBlog.net/Startup_Fundings_Are_Not_Easy.html. I hope this post and the other information on AngelBlog helps you get funded. Basil