None of those investors would get a board seat.

Yes, your breakdown is both preferable and more likely. But my point stands.

Your point stands, however, I didn't mean "board" management literally. I should have said "shareholders management". I'm not entirely familiar with US corporate law, but on roman based civil law, 10 investors with 25K of seed capital (ie non trivial amount of % votes) can get messy.

(although we did create a board with the breakdown I suggested, because we were lucky to pick the "right" FoaF investors, attorneys and counsels)

Under U.S. corporation law, shareholders have very little ability to affect corporate management, unless they own a large enough stake to impact board elections. In a start-up valued at $1MM post-money, these 10 angels are not going to own more than a couple percent each, while the founders will control 75 percent of the company. The founders will have more than enough voting control, assuming they vote together, to ignore the investors.

He might be talking about Canadian law which I would admit can be goofy with respect to startups. But I still don't think it's that big a deal.