What’s the best way to structure your board?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

When you actually incorporate a company, one thing you can do and that I highly recommend is putting together three to four common board seats upfront. This is critical, maintain control of your company as long as you can. At the board level is where it’s most critical. Many founders, including myself, actually lose control of their company after the Series A financing. When Practice Fusion closed its original Series A financing with Morgan Taylo… (read more)

What’s the best way to structure your board?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

If someone’s’ that valuable to help you or wants to be in the board that bad, put an advisory board together. Give them the same equity, give them a great title, but why make them your boss? Totally unnecessary. I recommend don’t adding board members unless you absolutely have to. Again, the board’s role is hiring and firing you so why create additional overhead, and again, to maintain control of the board as long as you can as a founder.

What’s the best way to raise the right amount of money?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

Don’t get so excited about the valuation that you’re throwing the baby at the bath water. I did this multiple times at Practice Fusion. I had advisors that wanted a huge valuation because as investors, it might make them look really good. Again, my ego got the best of me, but be willing, if you get a $20 million valuation, be willing to go back to that investor or someone else and go, “What if we do 10% off this and I can maintain a little more c… (read more)

What’s the best way to negotiate with an investor?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

For me, one of the things I think is really key is to always think about your downside. If this all ends today, not even if you’re fired, if the company goes out of business today, what do I have left, what do I have in my bank account? Can I get any liquidity from the equity? What’s really key here is that California is at-will so effectively, once you form your company, you start taking on investors and you no longer have control of the board. … (read more)

What’s the best way to manage your cap table?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

Another micro-strategy, this is more about the founder having some options on liquidity. This is effectively another thing you can do when you’re incorporating the company and putting together your original restricted stock purchase agreement, is issuing a portion of your state shares as Class-FF shares. This is a class of shares that was invented by Peter Thiel and Shawn Parker and what it is is it’s effectively a preferred share. If you have so… (read more)

What’s the best way to manage your board?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

A great lawyer can assist you in managing your board. When you think about your attorney, a great attorney, one I’ve used in the past and I’m using again right now, his name is Eldon Satusky, he’s at Wilson Sonsini, he spends half of his life in board meetings. He’s an expert on this. Leverage that expertise. A great attorney should be a strategic asset in managing your board. They should be able to give you a pulse on how the board’s feeling, wh… (read more)

What’s the best way to interview?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

When you meet an executive, if you really want to hire them, you should have them for one to two full days and don’t have them show you their current work. Have them spend a day learning the problem space, have them take some time to themselves and then come back and work with the team for a day on how they’d can fix it. At the end of that meeting, I guarantee you that the entire team would be yes or no. You have worked with them, you have de-ris… (read more)

What’s the best way to incorporate your business?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

Lastly, this doesn’t apply to everyone, but a C-corp makes decisions on what’s best for its shareholders and in contrast, many people here are starting healthcare based companies and they have social impact and social good, so one thing you can potentially do, this is a bit of an outlier, but you should consider potentially being a benefit corp, when they make decisions, they make decisions on what’s best for the community. A lot of financial dec… (read more)

What’s the best way to hire?

Ryan Howard (Founder @ Practice Fusion)
Transcript: Protecting yourself as the founder; Ryan Howard | VatorNews

A great candidate should be able to explain and deconstruct how they solve a specific issue at an excruciatingly low level. This is actually Elon Musk’s Litmus Test for hiring and this is something we found of service to us quite well. The other thing we learned over time is we tested everyone and it worked really well. Practice Fusion always had a top-25 rank culture in the Valley. When a developer would come in, we would effectively let them wr… (read more)