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With the influx of capital in the market, early-stage founders in Israel are raising massive rounds faster than ever before. As an example, traditionally a Series A round was closed after a startup had validated its product and secured paying customers. Today that same amount can easily be raised as a pre-seed round, often with no traction or market validation.

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Today鈥檚 larger checks are accompanied by the expectations of increasingly sophisticated investors. No longer just limited to local angels or private investors, early-stage startups now have global VCs sitting on their boards.

As a result, the board, which traditionally has served as an extremely strong asset for a new startup, has become a source of friction for the CEO, creating unnecessary stress.

To highlight how fundraising trends are affecting dynamics in the boardroom, the gathered data from more than 300 startup 1 CEOs and their investors. The report was created by startup consulting firm Y.benjamin, , Intel Ignite, and .

The key findings of their report are highlighted below:

Investors look to assert control through vetoes

Startup CEOs are struggling to manage the demands of their growing and evolving board. Of those asked, 36 percent of startups reported having a 鈥渄ifficult鈥� director on their board, a number that jumps to 43 percent for startups that raised more than $10 million.

CEOs feel as though these board members are making their lives more difficult, challenging them over company strategy, fueling heated debates, and in a surprisingly large number of cases, making their opinions heard through vetoes.

Of those asked, 28 percent of startups reported that their board has exercised at least one veto, blocking new fundraising rounds, executive compensation packages, and budget decisions. With the growing size of early-stage rounds, investors are dealing with higher risk, turning to vetoes as a way to assert their control and 鈥減rotect鈥� their investments.

CEOs are struggling to properly utilize their board

In today鈥檚 market, value-added teams have become the norm, focused solely on assisting the portfolio companies and helping drive their success.

Yet in reality, startups are not benefiting from this value, with the data showing a clear mismatch between the value investors think they provide and the value founders feel they have received. Investors overestimated the value they provide by an average of 20 percent. One of the main reasons highlighted in the research was that CEOs are not comfortable asking their board members for help, wary that it may be perceived as a sign of weakness.

, vice president and managing director at Samsung Next TLV, believes that in order to get ahead of this, 鈥渟tartups should schedule routine catch-up sessions with all their investors, whether they are board directors or not. By consistently and proactively updating company status and asking for help with specific tasks, CEOs keep their venture top of mind and maximize value-add from all investors.鈥�

Lack of transparency is hurting CEO-board relations

The research found one striking and recurring reason for today鈥檚 board challenges: lack of transparency. Of those asked, 61 percent of startups reported that they are not fully transparent with their board members, with the majority of founders delaying sharing bad news and sugar-coating major challenges and failures.

According to Inbal Perlman from , 鈥淐EOs who are fully transparent with their directors are the ones who maximize value and prevent challenges in the boardroom. Without transparency, board members are essentially spectators, receiving updates and reports on progress once in a while, but are not true partners in guiding the direction of the venture.鈥�

To overcome these challenges and leverage true value from their board, early-stage CEOs must change the way they relate to their board members. The key here is transparent and honest communication, a shift that must be embraced by both CEOs and their board members.

is a content strategist and founder of聽, a digital marketing agency that works with the global tech, venture and startup community.

provided insights and assisted in the writing and editing of this piece.

Illustration: iStock