MVP, bootstrapping, honing the product, now we’re raising money, hiring a team, managing the accounts, marketing, customer interaction, shit I forgot about the cleaning the office and what, now I have to manage a board of directors?
If you decide to take the fundraising route then sooner or later you will have to assume the task of managing a motley crew of board members who will all have an opinion about the future of the business and require a vast amount of your precious time. Given that we aren’t all clones of one another, you can expect to deal with (depending on your board size) around 4-7 different personality types – add this to your To Do list.
When you bring on a board of directors you suddenly have someone to report to so selecting the correct board members is fundamental. Your goal is to find people who can add valuable insights, give support and help you achieve your milestones quickly.
Managing a board isn’t an easy task so follow these below steps to avoid any of the potential harms that could come from having a nightmarish board.
1. Look for the right folks
Characteristically, some of your investors will require a seat on your board, which means being very careful about whom you take your money from. Like any good relationship you’re looking for someone you enjoy being around, someone you can relax with, who you feel comfortable reporting to, to brainstorm with, grab the occasional libation and receive the occasional shoulder massage. You will be spending a lot of your time with these individuals and if you can’t stand the site or sound of them then you will surely regret it in the long term. You want a board that you feel at ease with, who will add a great deal of value and who won’t be niggling you every few seconds about unimportant details.
If you decide to bring a non investor as a board member then be sure it’s someone who can add insights and value that the investors can’t (i.e. an entrepreneur with numerous exits under their belt and a fresh vision for the company).
2. Set expectations and communicate them thoroughly
As with your team, the same applies to your board members. If you don’t set clear objectives and communicate them thoroughly then you will likely create an unsteady feeling within you board and cause them to come to you, which is the last thing you want. If anything needs attention by the board then make it explicit when you speak with them.
At each board meeting set clearly defined goals and then work towards them. Be clear about what it is you want to achieve during the following months (whether by trimester or over the year) expansion, user growth, new business, etc. It is essential that everyone is on the same page thus unblemished communication is key.
Use a budget at each meeting and continually update it so you and the board have a baseline to compare against. Your numbers will vary significantly from the original financials you used while fundraising so updating it on a regular basis makes sense and will prevent you from having to defend numbers in a business plan that was made a few years ago and that has no relevance today.
3. Send easily comprehendible monthly KPI’s
Your board wants to know what’s happening and how the business is progressing so it’s vital to keep them updated. Each month send them an email and highlight the key metrics that are driving the growth of the business and show how they are evolving (hopefully in the right direction). Also in the same ‘reporting’ email let them know of any company milestones or new advances worth speaking of. If you have anything that needs to be addressed by the board then this is a good time to communicate it.
That’s not to say that you shouldn’t contact the board between these updates. If you have any questions that need answering on any help you need from the board then reach out to them. They are there to help!
4. Limit the board size to 5 or 6 people (including yourself)
The more people you have on the board the more you have to manage. Try and keep the maximum size to 6 people including your fine self. If you can keep the number to 5 then better. Odd numbers are good in case of a vote and you will want this mix of management and investors.
You can imagine how much time will be consumed managing 5 board members; opinions, advice, signing documents, getting them to board meetings, which is why keeping it lean is key. In my opinion, an ideal board would consist of 5 people, 2 investors, 2 management and 1 external superstar. This way when it comes to voting, the investors won’t have the sway.
It won’t always be that easy to achieve the above but setting out with this as your goal is a good first step.
5. Don’t show and tell
As you are surely by now a meeting master, efficient to the core, you know that long and tedious show and tell meetings are not very useful. Like with staff meetings, send out the presentation you’re going to give beforehand and insist that the entire board read over it. Keep it short and focused on the key metrics that affect the bottom line, big milestones, runway left and any other important factors. There is no need to produce a 50-page presentation when you can sum it up concisely in probably 10-20 pages. This presentation should act as a starting point so that these points can be discussed in more detail during the meeting.
6. Don’t let the meetings drag on
Long meetings are tedious and waste a lot of time. The same goes for board meetings. Allocate a time period (3 hours should be enough) and make sure you stick to it. Remember you will need to assign time for board feedback and important decisions to be made so don’t take up all the time with your presentation. 60 minutes for your presentation, 90 for board feedback and then 30 for any important decisions that need to be taken should be enough.
When your lawyers call the board meeting the agenda will be sent out with it so make sure the board reads over this too so they have an idea of the proceedings.
7. Avoid lengthy debates over email
Refrain from engaging in any lengthy debate with the board over email, as this should be dealt with in person. It is not only time consuming but can create negative sentiment and misunderstandings.
What other tips do you recommend to manage your startup boards?
Business people in meeting via Shutterstock
Board meeting via Shutterstock