1/ I like this Q about advice from @HarryStebbings re board mgmt for founders because I found it difficult to articulate an answer. I’ve heard conflicting advice from others, but here is my view from my experience as both an investor and CEO.
2/ DISAGREE & ALIGN: Board management starts before board member joins board (or investor invests). First – align on values/vision/OKRs with the board member BEFORE they join. I can’t stress that enough. I once made the mistake of not doing that and results were horrible. Really
3/ It is exciting that someone wants to invest in your baby- but if you get a board member with different meaningfully values/vision than you, artful board management isn’t going to stop the tornado of chaos that is coming your way.
4/ How to align? Convos, references, long dinners. Make vision clear to new board member and perhaps her partners at the VC firm. Don’t avoid hard topics. Seek out pre-close. Make sure you 2 disagree well. 1 reason to build relationship with next investors in advance of raise.
5/ I know that’s scary to disagree pre-close, but if you can’t disagree effectively you don’t want to work with that investor. You need to know that ASAP.
6/ BOD CONSTRUCTION: Next-think about board construction if feasible. Diversity of all kinds – gender, race and in particular diversity of thought. Have a bunch of lifelong VCs on your board? They may think very similarly. Consider strong independents to balance perspectives.
7/ COMMUNICATION: Communicate. Over communicate. Then when you think it is completely obvious, remember that your VCs spend ~20% of their time on portfolio mgmt and you are 1 of ~10 board seats for them (you represent about ~2% of their mindshare). Now communicate some more.
8/ Set expectations on board meetings. Schedule way in advance (we will schedule all 2019 board meetings in Q4 of 2018). We don’t move them. Consistency helps w/ engagement (and trust). Last-minute surprise doesn’t.
9/ For Seed round I recommend 6 official board meetings a yr, w/ board calls in between. A-C round, 6 board mtgs, after C I think 4 is fine.
10/ Board decks should have overview of what’s going well/what you’re worried about (1st slide), product update, key business initiatives, financial (including potential raises/ burn discussion), regulatory/legal.
Send deck at least 48 hrs in advance.
Send deck at least 48 hrs in advance.
11/ Carve out 15 min at end of mtg for board to meet w/o Founders in room. Then have lead board member (ideally independent) provide feedback to you from the board. Good governance.
Make it easy for them to give you feedback.
Make it easy for them to give you feedback.
12/ Give your lieutenants the chance to lead relevant discussions in board meetings. Empowers them, celebrates their work (helps w/ retention). Makes mtg more interesting. Helps VCs have more context on quality of your team (and can provide you feedback on +/-).
13/ Give space for strategy discussions. They need to know the key details, for sure, but don’t get bogged down w/ the Trees. Make sure you pull up and spend time on the Forest. That is where good board members will shine- and it is your job to put them in a position to succeed.
14/ Between meetings: Provide detailed monthly updates. Ours include the discussion of financials, as well as updates on our product, the team, business unit updates, and overall Key Results. Give attention to what’s working/what you’re worried about.
15/ About 90% of the time no board member responds to my monthly email. IMO that’s ok- it means we’re aligned. If nothing else, I find those updates help to center my mind and focus on what matters.
16/ BUILD RELATIONSHIPS: Invest into each relationship. Grab dinner or bfast, jump on occasional calls. Build trust with each.
FYI here is how I think about trust:
FYI here is how I think about trust:
17/ You’ll get better advice, you’ll build deeper relationships, you’ll have more real conversations, you’ll be able to more effectively have hard conversations, and you’ll enjoy each other more if you build trust.
18/ BUDGETING: I recommend doing 6 month budgets w/ board instead of 12. For early stage co’s, 12 month budgets are Garbage In-Garbage Out. Too hard to predict. That sets you & board up for failure in terms of expectations. Set 6 month goals then revisit.
19/ BE UPFRONT: No surprises - product launch delays, big cash burn increases, regulatory issues, bad PR, etc. NO surprises. Help manage that with #14 above. But also proactively reaching out about anything they would find interesting.
20/ But don’t limit to just bad news, also make sure they are aware of big positive initiatives you are thinking about discussion at next board meeting so they have time to think through in advance.
21/ Never ever announce something big at the board meeting. Everyone in the room should have had chance to discuss in advance 1:1. It’s tempting. Don’t do it.
22/ CLARIFY ROLES: Your role, your co-founder, rest of your team. What are you looking for from each board member? Want one of your investors to really lean in on product? Does she know that? Think you want another to dig into how you're thinking about the next raise? Clarify.
23/ Those are some of the things I’ve learned that help with effective board mgmt. Some would wildly disagree with these. Last fall at the @GoldmanSachs tech conf, a CEO told me he thinks the board’s job is to constantly be asking “should we fire the CEO.” He would hate my #17
24/ Everyone has their own style. I believe there are many paths to successful board management. IMO key to success is purposefully clarifying yours.
