Take-aways from a talk in the Trust Center on 6/16/16
Prepare for board meetings:
- Come prepared!
- Don’t sugarcoat problems - “the straight shooters are always the ones that persevere”: Present problems as they are - what’s right, what’s wrong, and what needs to be fixed.
- Don’t surprise your BOD - contact individuals in advance to inform of any significant events - both good and bad. Provide the presentations ahead of time.
- Be reasonable - don’t overwhelm the board. Present information to maximize use of your time.
- Focus on the market - “No customer = No company”
- “Deliver on the promise” - when identifying a viable market, make sure you design a product that delivers
- Have a viable business model - “You need to make money”.
- Be flexible - the market is dynamic and sometimes you’ll need to pivot your direction
- Successful teams are: motivated, cohesive, have common sense
Team dynamics in relation to BOD:
- Your BOD is your boss!
- BOD and the leadership team must be in synced. This is a team effort.
“The nature of your board changes at different stages”
The different stages:
- Early stages (1st round of financing): “Your board is your VCs - choose them wisely”
- Choose VCs on an individual basis. Your VCs are your first board of directors and will have a strong impact on strategic decisions for your company.
- Try to get at least two of your team members in the board (CEO + CTO/CMO)
- Recommended board size: up to 5 members (odd number is critical for decision making)
2. Growing phase (2nd-3rd rounds of financing): Adding independent board members - ”Don’t waste board seats”
- Choose independent board members based on the expertise you need - recommended: sales and marketing skills, high influence / connections
- How to recruit independent board members
- Recruiting companies that specialize in matching board members with companies
- Develop connections with advisors that can be prospected independent board members
- Recommended board size: 7 members (odd number is critical for decision making)
3. Before IPO - Setting committees
- Audit committee: responsible for the direction and financial health of the company.
- Choose an audit chair who’s a financial expert
- Additional committees (sometimes combined): Nomination, Governance, Compensation