Which would you say about your Board, or your experiences dealing with a Board?
Boards are a critical but complex topic for founders. The reality is a well chosen and curated Board can be the biggest blessing you could ever wish for. Equally ,a poorly constructed Board is a recipe for frustration and stress. Here is the thing, from my experiences directly and indirectly, keeping in mind in the last ten years over 90% of my clients have been VC backed start-ups and scale-ups, It is better to have a Board than not. With the caveat, a badly put together board can be far worse than not having one at all. But not having one is… sub-optimal!
It’s a big and complex topic, and I’ll revisit elements of constructing the perfect board in the coming weeks and months. Happy also to address any questions or offer free, and of course confidential, agony aunt services to any founders, or VCs out there.
It’s a topic that has been at the forefront of my mind lately as we’ve been conducting more Board and NED searches ourselves, and because the team have also been brought into a number of searches where a founder or CEO has been either side-lined by investors and the Board (typically to CTO), our ousted completely. And that is important to realise, as soon at you take on investment, you are no longer fully running the show, and statistically, the number of founders of VC backed companies that are still CEO at exit, is pretty small. So why would you do it? For myriad reasons of course. Investment is often a necessity for the growth you need or aspire too.
Below is short video I recorded with a client that has constructed a fabulous Board. He shares why it was a priority, and a little of the how too. After that, I share the good the bad and the ugly.
The Good
A well curated and functioning board can elevate your growth significantly. They can help open doors you couldn’t even knock on, they can solve problems you haven’t even thought of yet, they can bring years of mistakes, wisdom and experience, and the good ones won’t tell you what to do, but as Gavin says in the interview, help you to come to the right conclusions, by asking the right questions. They can be your coach, your shoulder to cry on, your accountability partner, your cheerleader, and your bringer of tough love. A great Board can be a utopian thing.
The Bad
If the Board is not well put together, or you choose the wrong people, or the right people for the wrong reasons/expectations you could find yourself paying in cash and/or equity for inertia and platitudes. Worse still for someone who shows up once a month or quarter for the coffee and biscuits and to collect their cheque! A waste to time and resource. Of course if your investors dictate and dominate your Board, then you could find yourself with a Boss you didn’t want or ask for, especially if you didn’t choose investors wisely.
The Ugly
If you have really screwed up on the Board front, or not taken care to curate, then you can have a nest of vipers on your hands. Each with a vested interest, a loud opinion, and an Ego the size of Australia! It’s a world of pain you don’t need. You’ll be wanting to jump before you are pushed. It really can be disruptive and indeed destructive for you and your business.
Curate
I used the word curate earlier deliberately. A board is to be curated. Thought through well, what do you need, why? What skills, what experiences, what personalities? At different stages of your business, the make up of the Board should adapt and reflect that. Be careful about giving away too much too soon, or thinking that a Board is a Board for life. Very likely that is not ideal. Be deliberate. Of course one obvious warning is to be careful who’s money you take. Most investors will demand a seat on the board. That can and should be a very good thing. If they are the right kind of investors. If they are not…….It’s pretty grim.
As a founder, as soon as you take investment, you are no longer fully the captain of your ship, BUT, be wise in how you curate and manage your board, and not only will the world be less painful, it should make for a fun and lucrative journey.
Boards can be critical, the make up of the Board is crucial. Be considered, deliberate and thoughtful in how you put your Board together, and whatever you do, don’t have one dictated to you, without your input, and where possible, veto.
Get it right and you’ll reap the rewards, get it wrong and you’ll be….. not where you’d want to be.
For an informal and confidential coffee around any of these issues, DM me. I’m also happy to answer any questions more publicly and generally if required in comments.
David
