Intro to boards: the working board
This blog post is part of a series on Board Best Practices. Stay tuned for more posts on the way! Active posts include:
- The Monthly Call (what it is and why it’s important)
- How to Prep for Board Meetings
Early-stage boards are small groups of people (typically 3-7) working together to support and build value in a business. Formally speaking, the primary responsibility of a board is to serve as fiduciaries for the broader shareholder-base of a given company, including:
- Overseeing internal corporate procedures
- Making key leadership decisions
- Making important capital allocation and fundraising decisions
While these are certainly important items, we view them as table stakes. If assembled and managed correctly, a good board can build value for a company far beyond the technical mandate described above.
Put your board to work!
“Someone once said to me that the CEO has the loneliest job in the world. And in many respects, that’s true. However, the board exists to help alleviate that by giving CEOs a sounding board for ideas and a peer group with whom to interact.” — Seth Levine, Foundry Group
Too often, early stage CEOs settle for a pure reporting relationship with their board and limit communication to quarterly reviews, leaving a tremendous opportunity on the table. Don’t settle! There should be a clear expectation that each director contributes beyond showing up for the quarterly meeting. Make concrete requests can help keep board members accountable.
Assemble your board wisely
Valuable board members bring various abilities, skillsets, and experiences to help you see around corners and accelerate the value of your business. Carefully consider the strengths of the existing board and seek to complement those when you add new members. Just as it’s critical to get the best combination of people on your leadership team, it’s important to put the right people on your board.
How Vocap helps
Vocap takes the time to roll up our sleeves and work for you, not just dial in for an occasional meeting. We provide hands-on partnership for our portfolio companies, including:
- Recruiting and interviewing
- Organizational planning
- Strategic planning (e.g. applying relevant frameworks)
- Raising capital (crafting the narrative, making fund intros, roadshows, etc.)
- Exit planning
- Introductions to our business network
- Sales & marketing process improvement
- Financial modeling
- Pricing and churn analysis
- Product strategy
We’ve served on dozens of boards over the years. The best boards have a strong mix of industry, operating, and financial experience, and each board member comes prepared to get to work.
Trust and transparency
“In the absence of trust, you simply will not have an effective board. Trust is hard to earn and easy to lose. While board members will have different personalities and may have divergent goals and polarizing or conflicting styles, an underlying basis of trust among all board members is foundational to the success of the board as well as the company.” – Brad Feld and Mahendra Ramsighani, Startup Boards
Building genuine trust is a prerequisite to getting the most out of your board. The more you loop your board into what’s going on, the more trust you build and the more they can support you. Deliver bad news fast, so your board has a chance to help. Don’t hesitate to reach out to board members directly and be honest about what’s burning in your mind. The best CEOs are upfront about what they don’t know.
Of course, this is a two-way street. Just as good board members expect complete information, strong CEOs seek candid feedback from their board members. The consummate ‘cheerleader’ director provides a quick shot of adrenaline but won’t drive you and the business forward. The best CEO-board dynamics are rooted in honesty, fairness and trust.
Vocap is a team of former entrepreneurs and operators. We’ve been in your shoes and we understand that running an early-stage company can be a roller coaster at times. We expect to work hard for our companies and look forward to helping our CEOs build great businesses.
This blog post is part of a series on Board Best Practices. Stay tuned for more in the coming weeks!