View profile

Bursts of Color - Independent Board Members

Bursts of Color - Independent Board Members
By Geoff Donaker • Issue #25 • View online
Most start-up boards only include one or two founders plus one or two VCs. This tends to create a “showing the report card to mom and dad” dynamic for board meetings that nobody much enjoys. It doesn’t have to be this way.

Not a fun board meeting
Not a fun board meeting
When a Board Includes Only Founders and Lead VCs…
…you can end up with an us-against-them dynamic that does not produce great collaboration. In its worst form, founders protect their turf by only selectively sharing information and investors react by asking pointed questions and requesting busy work projects. This situation is often worse when the investors have little or no operating experience, which makes the founders more likely to roll their eyes… and the cycle continues.
Healthier Board Composition
In an ideal world, the board is a complementary group of leaders who can support the founders based on their own real-world experiences. Public company boards, such as those at Apple and Amazon, are usually a mix of former CEOs, CFOs and leaders from government or adjacent sectors. Yelp was lucky in this regard from its earliest days: the original four-person board included 1 Founder, 1 VC and 2 outside execs (one technical background, one legal). This created the sort of natural team dynamic and conversation flow that I didn’t appreciate until attending other people’s board meetings in later years. 😬
The Benefits of Independent Board Members
Even a single outside board member can begin to shift this mom-and-dad dynamic into something more like a team. While these complementary board members often occupy seats designated for Independents, they can also occupy Common or Preferred seats. That part matters less IMO. The key requirement is that this person has achieved enough success and experience in a related arena to have earned the respect of both founder and VC, so they will be more likely to speak up and be heard. Preferably this person also brings: (1) diversity of experience and background, (2) sufficient time and interest to commit to your role, (3) the sort of welcoming demeanor that makes you want to call them and (4) not too close a relationship with the other investors.
Easy Ways to Get Started
So this all sounds great, but you’re worried about making a long term commitment to the wrong person? The good news is that you can begin benefitting right away without getting “married” to the new board member. Invite a candidate (or even two!) to join your next board meeting without commitments on either side. You can even try this with different people over time for the sake of learning and variety. If one of them seems like a great fit, invite them to be a board advisor or observer for a year. And as soon as you’re feeling confident, ask them to make it official! Nothing in life is permanent anyhow…
Did you enjoy this issue?
Geoff Donaker

Bursts of Color is a newsletter for start-up leaders who work with Burst Capital. It's meant to include products, people and ideas that I think are interesting and maybe relevant for you.

In order to unsubscribe, click here.
If you were forwarded this newsletter and you like it, you can subscribe here.
Powered by Revue