One of my favorite VCs, Fred Wilson out of NYC, addressed this issue of who you want on your board. Here's his post and below because it is just so important.
While Fred speaks to the issue of "who" should be on your board, he just naturally assumes the most important thing: that you even have a board in the first place. If you are really serious about building a first class company, you will have a board. You will understand the importance of building your company from the top down.
You will have a Board of Directors because you have significant shares in your company in the hands of investors, advisors, employees, etc.
Or, you will have a Board of Advisors, because you own all, or almost all, of the stock in your company, but you know the value of having regular meetings with really smart people who are focused on helping you, watching your blind spots, and who have experience doing what you need done.
Here's Fred's post:
While Fred speaks to the issue of "who" should be on your board, he just naturally assumes the most important thing: that you even have a board in the first place. If you are really serious about building a first class company, you will have a board. You will understand the importance of building your company from the top down.
You will have a Board of Directors because you have significant shares in your company in the hands of investors, advisors, employees, etc.
Or, you will have a Board of Advisors, because you own all, or almost all, of the stock in your company, but you know the value of having regular meetings with really smart people who are focused on helping you, watching your blind spots, and who have experience doing what you need done.
Here's Fred's post:
Who You Want On Your Board
One of the guys who taught me the venture capital business used to say "success is in inverse proportion to the number of VCs you have on your board." He was right. For a few reasons. First of all, most VCs get on your board by virtue of financing rounds you do. If you do a lot of financing rounds, you will collect enough VCs on your board to field a basketball team. And that sucks. And it means you had to raise too much money too. All of which are bad things.
But there is another reason and it became perfectly clear to me on Tuesday when I had back to back board meetings.
The first meeting was almost a celebration. The company had put together a phenomenal year in 2012 and there wasn't much to be concerned about. But the best question asked of management in the entire meeting was asked by an independent director who happens to be a CEO of a company that is five times bigger than our portfolio company. In the midst of the "celebration" he brought everyone back to reality and got folks to think about what we could be doing better. It was a great board moment.
The second meeting was even more interesting. The CEO was seeking advice on some important strategic questions. And this board has two investors and three very experienced operating executives on it. And one of the investors (not me) has deep operating experience. So you had essentially four very experienced operating executives plus me giving the CEO advice. It was a great meeting. I walked out thinking "that is the way a board should be constructed."
If I could construct the perfect Board for the companies I am invested in, it would be the CEO, me, and three CEOs who have built and/or run one or more tech companies of scale. If you have a very experienced VC on your board, you really don't need more of them. But you can never have enough peers on your board who have been where you are before. That is invaluable.
No comments:
Post a Comment