Do you dread walking into your board meeting? Do you feel that you are going to be chewed up for not meeting your plan or how you are going to be challenged on your last decision? Do you feel humiliated when you are finished with your board meeting? Well, if this defines your board meeting, I would recommend that you either fire your board or dissolve it. If you are not in a position to do either then there is only one thing you can do to turn the Board around; fix your sales process and generate revenue. I have written about this before, nothing fixes things faster than sales and revenue in a startup. Your board is a great asset, your board members should be working to help your Startup. The most effective board meetings are filled with excellent intellectual discussions about strategy, vision and how to build a great product, market and company, where every board member with the founder creates a positive symbiosis of actionable items. The prerequisite for having great board meetings is to make sure your board members are there to help you and on your side. Every board member should add tangible value to the founder.
I highly recommend the book Startup Boards: Getting the Most Out of Your Board of Directors by Brad Feld and Mahendra Ramsinghani. Here is a small excerpt of who you should have on your board while building your company:
Identifying Great Board Members
Entrepreneurs put tremendous energy into recruiting a phenomenal vice president of engineering, hiring the best developers, and building an amazing sales organization. But when it comes to attracting board members, many entrepreneurs are casual, or even passive, about recruiting great board members.
While a venture capitalist (VC) board member is often a requirement of an investment, you generally also have the option of adding one or more outside board members early in the life of your startup and over time transitioning your board more heavily toward non-investor board members. As an entrepreneur, it’s your responsibility to do your homework and understand the character of any potential board member, even if they are a prospective investor. A common cliché is that investors buy their board seat – in most cases, once you have them on the board, it’s difficult to get rid of them.
A great board member has, at the minimum, the following attributes:
- Bold mindset. A board member at an early stage company understands that startup trajectory, which is often a roller coaster ride without the barf bags. The board member is comfortable with ambiguity, can make decisions with imperfect information, and has a bias for taking action. He can be brutally honest, calling out weakness and problems he sees, while delivering feedback in a calm and constructive fashion. While he is articulate, he doesn’t serve up banal platitudes, blather on like a perpetual Pollyanna, or endlessly ask questions. He is balanced emotionally and, as Union Square Ventures partner Fred Wilson says, has “great judgement and ethics.”
- Entrepreneurial experience. Experience as a founder, CEO, or executive in an entrepreneurial company is highly desirable for early-stage company board members. While there is an endless argument about whether VCs who were once entrepreneurs are better than VCs who were never entrepreneurs, VCs who have never been entrepreneurs can have extraordinary amounts of entrepreneurial experience based on the companies they’ve been investors in. Steve Blank (serial entrepreneur and author of The Startup Owner’s Manual: The Step-By-Step Guide for Building a Great Company and The Four Steps to the Epiphany) writes, “A veteran board can bring 50-100X more experience into a board meeting than a first time founder. VCs sit on 6-12 boards at a time. Assume an average tenure of 4 years per board. Assume two veteran VCs per board = 50-100X more experience.”
- Domain expertise. A strong network and connections within the industry or market you are operating in can be a big advantage. “If I was picking a VC, I would pick one based on similar investments they’ve made. The greatest value we’ve gotten is from companies that are in the same sector and would help us propel ours. VCs have leverage over their portfolio and can accelerate partnerships,” says VictorOps CEO Todd Vernon. Neil Robertson, CEO of Trada, who has served on a half-dozen VC-backed company boards, adds, “I have studiously avoided MBA-type board members who learn how to run a business by attending board meetings at the expense of the startup. I just think it is obnoxious. I’ve not let such people invest in my company – they would not be a good fit as a board member.”
The last one is very important, if you have board members who do not understand or take the time to understand the business you are in. Your board meetings usually become educational sessions where you are spending a lot of time explaining how your product or business works. It is ineffective and usually leads to disaster.