What’s the best way to use your board well?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays: Leveraging Your Partners To Grow And Develop Your Team – AVC

Selectively engage your investors in the recruiting process. Use them when they can help. Use them to close an important candidate. Use them to get a second or third opinion on a particularly important hire. Don’t give your investors control over your hiring decisions but engage them as trusted advisors.

What’s the best way to use your board well?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays: Leveraging Your Partners To Grow And Develop Your Team – AVC

Expose your investors to your team. Give them a sense of the culture of the company and the composition of the team. Give your best and brightest “air time” with your investors. Your employees will like it and so will your investors. I really enjoy being invited to speak to an all hands meeting, or to have lunch with the team, or to go play paintball with a couple portfolio companies.

What’s the best way to manage your board?

Roy Bahat (Head at Bloomberg Beta)
Also, The trust thing

The investor-founder relationship is, by nature, out of balance. Founders are devoted to the most important (work) project of their lives; investors have the luxury of more than one such project at a time. Founders can do incredibly well personally, under circumstances where the investors may do fine though not great. Founders know much more about their company, investors know a little more about what’s happening elsewhere in the world (maybe).

What’s the best way to manage your board?

Boris Wertz (Founder of version one ventures)
The investor’s role in a founder’s three key priorities – Version One

The best investors are instrumental in helping founders recruit the perfect team. An investor should serve as a critical sounding board during strategy discussions… In those discussions, the best investors are great listeners and rather ask the right questions than provide all of the answers. Great investors have a large network to pull from and make very specific introductions.

What’s the best way to manage your board?

Sam Altman (President at Y Combinator)
Board Members – Sam Altman

Board members are very useful in helping founders think big and hire executives. Board members are also a good forcing function to keep the company focused on execution. In my experience, companies without any outsiders on their boards often have less discipline around operational cadence. As a side note, bad board members are disastrous. You should check references thoroughly on someone before you let them join your board.

What’s the best way to use your board well?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays: Leveraging Your Partners To Grow And Develop Your Team – AVC

Selectively engage your investors in the recruiting process. Use them when they can help. Use them to close an important candidate. Use them to get a second or third opinion on a particularly important hire. Don’t give your investors control over your hiring decisions but engage them as trusted advisors.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
MBA Mondays: Leveraging Your Partners To Grow And Develop Your Team – AVC

Expose your investors to your team. Give them a sense of the culture of the company and the composition of the team. Give your best and brightest “air time” with your investors. Your employees will like it and so will your investors. I really enjoy being invited to speak to an all hands meeting, or to have lunch with the team, or to go play paintball with a couple portfolio companies.

David Jackson (Founder, Seeking Alpha)
Do most VCs add negative value? | A Founder’s Notebook

Being aware of where you add value vs. not isn’t just a requirement for VCs — it’s true for everyone. Having clarity myself about where each board member adds value vs. not has significantly helped me get the most out of Seeking Alpha’s (excellent) board.

David Jackson (Founder, Seeking Alpha)
Where VCs and board members add the most value | A Founder’s Notebook

In my experience, Seeking Alpha’s board members have added most value in three areas: (i) helping us hire great people, (ii) introducing us to business partners, and (iii) helping us raise money by enthusiastically introducing us to other investors.

What’s the best way to run your board meeting?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Do You Want Better Board Meetings? Then Work The Phone – AVC

I was talking to the CEO of one of our portfolio companies last week. He was preparing for a board meeting that is coming up. He told me that he had scheduled calls with all of his board members and investors that attend his meetings and had completed most of them. He had gotten feedback on what they were thinking about his company, what they are excited about, what they are concerned about, things they want to discuss, etc. He said it had made a… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Do You Want Better Board Meetings? Then Work The Phone – AVC

You can keep the calls on the short side, 15-30mins each, and that means it is two to three hours of work for most board sizes and investor groups. I would recommend doing these calls one to two weeks before the meeting so you have time to collect all of the feedback and incorporate it into the agenda and the board materials. But don’t do it too far in advance because you also want your board members and other attendees to be “fresh” in terms of … (read more)

David Jackson (Founder, Seeking Alpha)
How we run board meetings at Seeking Alpha | A Founder’s Notebook

No dial-ins because it kills the conversation. If someone can’t attend, call them the following week to update them. Don’t go through the board materials during the meeting we assume everyone read them in advance. No texting or emailing during the meeting so we provide a break for people to make calls or email. Never make decisions during the board meeting group dynamics are unpredictable and an unreliable decision making mechanism.

David Jackson (Founder, Seeking Alpha)
Don’t waste your board meetings on updates | A Founder’s Notebook

Don’t waste your board meetings on updates. We take an extreme approach to board meetings in Seeking Alpha — there are no updates. The updates are in the board letter and time series charts, which we send to the board and expect everyone to read before the meeting. The entire meeting is devoted to discussion, and lasts no longer than three hours.

David Jackson (Founder, Seeking Alpha)
How we run board meetings at Seeking Alpha | A Founder’s Notebook

Invite input. Ask the board members before the meeting for their wish list of discussion topics for the meeting and board packet. Send out the board packet early to allow everyone to read it in advance. No powerpoint in the board packet because it isn’t conducive to rigorous analysis. Instead, I write a letter which references a comprehensive set of time-series charts. Be transparent share the board packet with the whole company before sending it… (read more)

Peter Fenton (General Partner at Benchmark)
Sunday Conversation #1: Peter Fenton, Benchmark Capital – Haywire

Great board meetings are focused on asking tough questions and applying critical thinking, as opposed to just updates. I encourage a lot of the entrepreneurs I work with to get rid of the PowerPoint.

Peter Fenton (General Partner at Benchmark)
Sunday Conversation #1: Peter Fenton, Benchmark Capital – Haywire

If you think about it structurally, I think there’s something ideal in a board meeting where about a third of it is update. “Here’s how we’re doing, here are the financials, here’s the progress against commitments we’ve made. ” The second third should be some meaty topic, you know, competitive landscape, potential product road map, any number of things, but a really meaty discussion which is bringing out the best of the board members. The last th… (read more)

David Jackson (Founder, Seeking Alpha)
Don’t make decisions in board meetings | A Founder’s Notebook

The CEO should speak to every board member individually before the board meeting, and should try to know each person’s viewpoint before the meeting.

David Jackson (Founder, Seeking Alpha)
Board packet — why we send a letter instead of slides | A Founder’s Notebook

I stopped using a PowerPoint for our board packet a while ago. It was too easy to make minor updates to last quarter’s slides, leading to formulaic results. So instead, I now provide two Google docs to the board, which I share with the whole company: 1. A comprehensive set of time series charts. 2. A letter covering what happened during the quarter, our focus for next quarter, and our strategic position. The letter is 3-5 pages long, and referenc… (read more)

What’s the best way to manage your board?

David Jackson (Founder, Seeking Alpha)
Asking your VCs questions | A Founder’s Notebook

I sent our board members 5 questions [after the meeting]: What was your overall reaction to our board meeting? What are the biggest factors holding us back? What blind spots (if any) do you think we have as a company? What is your top piece of advice for us? How do you think you can add the most value to [the company] between now and the next board meeting?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What Makes For The Most Productive Management-VC Partnership? – AVC

My number one suggestion is frequent face to face communication. If you can’t do face to face, then I suggest hangouts or skype. And do it regularly. Make it a routine. I have breakfast every two weeks with quite a few of the entrepreneurs I work with.

Jim Whitehurst (CEO at Red Hat, former COO of Delta Airlines)
How to Establish a Great Relationship With Your Board | Inc.com

One-to-one and two-to-one discussions are often where you can really gain knowledge and value… Try to interact three times as much with your board outside of the formal meetings as you do during formal meetings.

Boris Wertz (Founder of version one ventures)
The investor’s role in a founder’s three key priorities – Version One

The best investors are instrumental in helping founders recruit the perfect team. An investor should serve as a critical sounding board during strategy discussions… In those discussions, the best investors are great listeners and rather ask the right questions than provide all of the answers. Great investors have a large network to pull from and make very specific introductions.

Sam Altman (President at Y Combinator)
Board Members – Sam Altman

Board members are very useful in helping founders think big and hire executives. Board members are also a good forcing function to keep the company focused on execution. In my experience, companies without any outsiders on their boards often have less discipline around operational cadence. As a side note, bad board members are disastrous. You should check references thoroughly on someone before you let them join your board.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What Makes For The Most Productive Management-VC Partnership? – AVC

Once you’ve signed the documents and started working together, my number one suggestion is frequent face to face communication. If you can’t do face to face, then I suggest hangouts or skype. And do it regularly. Make it a routine. I have breakfast every two weeks with quite a few of the entrepreneurs I work with. For those who get up late, we do afternoon meetings or hangouts.
Email is great for information sharing. But for building a relations… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
What Makes For The Most Productive Management-VC Partnership? – AVC

Which leads me to my third suggestion. Do not ever act like the entreprenur works for you. Because they don’t. If anything, the VC works for the entrepreneur. So the relationship must be as peers who respect each other and are working together to get to the right anwers. This is a partnership not a boss/subordinate relationship.

David Jackson (Founder, Seeking Alpha)
VC pitfalls to watch for: trying to fix companies | A Founder’s Notebook

You don’t want investors who think their role is to enlighten you or fix your company.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Entrepreneurs Have Control When Things Work, VCs Have Control When They Don’t – AVC

An entrepreneur or hired CEO can own as little as 5-10% of a Company but they can control it like a dictator if they are doing a great job running the business and the company is making a lot of cash flow and has no need for additional capital. An entrepreneur can control 95% of a company and all the seats on the board but they can easily lose control of the business if they company is floundering and they need more money and the only investors w… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Onboard Your Board – AVC

When you put someone new on your board, ask that person to spend a day or two at your company. Set up “one on ones” with your entire senior team, have them attend an all hands, have them sit in on the weekly management meeting, and spend some quality time with them (dinner?) during this process. That will help your new board members immensely. They will be “up to speed” on the business from the very first board meeting instead of having to spend … (read more)

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)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Losing The Team – AVC

Boards can be pretty patient. They can put up with a lot of failings, particularly in the early days of a startup when the product isn’t where it needs to be. But one thing a Board cannot tolerate is when a CEO loses the confidence of the team. If I think about the times I have had to remove a CEO, by far the most common reason was the loss of confidence of the team in the CEO. You get the call from one of the senior team members.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors: Board Committees – AVC

The Board is required to provide oversight on the Company’s financial statements, the Company’s compensation plans, and the ongoing maintenance of the Board.
As such when a Board gets big enough to justify them, it makes sense to create committees of the Board to deal with these specific responsibilities. A good question to start with is “when is a Board big enough to need committees?”. A three person Board should not have committees. The Board … (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors: Board Meetings – AVC

I’m a particular fan of the twice a quarter Board meeting. The idea is to have one meeting mid quarter and one meeting after the quarter has been completed. A lot of public companies use this format since the Board needs to review the quarterly numbers before they are reported to the public. I think eight meetings a year is a great heartbeat for a Board and this schedule works well for all kinds of companies.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors: Board Meetings – AVC

I prefer that the Board get all “official business” out of the way at the start of the meeting so that the meeting doesn’t have to get cut short to approve stock options, minutes, or some other important but perfunctory Board resolution.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors: Board Meetings – AVC

Board meetings should last two to three hours. I think two hours is too short. But more than three hours of intense discussion will turn most brains to mush. So you can’t go on too long either.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors: Board Meetings – AVC

There are a few techniques that I’ve observed over the years that I like a lot. The first is that the Board deck should be sent out three or four days in advance and it should include all the important financial and operational results for the Board to consume in advance of the meeting.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors: Board Meetings – AVC

Possibly the most important technique I’ve observed over the years is the executive session at the end of the meeting. This is when the Board meets without the CEO and team in the room and has a discussion of the meeting and what the key takeaways are. The executive session can be five minutes or it can be a half hour. Sometimes there is very little to discuss in executive session. Sometimes there is a lot. After the executive session ends, the C… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors: Board Chemistry – AVC

When you are building a Board, you must think about chemistry as much as you think about it when you hire a team. You want to have a Board that can work well together.
And you need to invest in chemistry after you’ve assembled your Board. I like regular Board dinners before or after the meetings. There is nothing like breaking bread and having a beer or a glass of wine to get folks to relax and connect.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors: Board Chemistry – AVC

Sometimes you will have a Director (or two) that just doesn’t fit in. Unless that Director has a contractual right to their seat (usually as a result of investment) or brings a critically important skill set to the Board, you should seek to remove that person from the Board and replace them with someone with similar skills who will fit in better.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors – The Board Chair – AVC

It is common for the founder/CEO to also be the Board Chair. I am not a fan of this. I think the Chair should be an independent director who takes on the role of helping the CEO manage the Board. The CEO runs the business, but it is not ideal for the CEO to also have to run the Board. A Chair who can work closely with the CEO and help them stay in sync with the Board and get value out of a Board is really valuable and CEOs should be eager to have… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors – Selecting, Electing & Evolving – AVC

When the founder loses control of the company (usually by selling a majority of the stock to investors), it does not mean the investors should control the Board. In fact, I would argue that an investor controlled Board is the worst possible situation. Investors usually have a narrow set of interests that involve how much money they are going to make (or lose) on their investment. It is the rare investor who takes a broader and more holistic view … (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Board Leadership – AVC

If you are not getting what you want out of your board, or worse if your board is causing trouble for you and your company, consider addressing the board leadership question. There is nothing worse than a collection of strong minded people who don’t agree with each other all telling you what to do and pulling you in multiple and opposing directions. If that feels like what is going on with your board, you need to find someone on the board to step… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Board Leadership – AVC

The leader of the Board should help you set the agenda of the board meetings. They should help you decide what is important to talk about at the meetings and what is not. They should help you get through the meeting on time and cover everything that needs to be covered. They should make sure the most important topics get the most air time. And they should make sure that everyone who wants to say things get to say them without taking over the meet… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Anxious Investors – AVC

Here are a few suggestions for managing anxious investors: 1) Increase the frequency and duration of the communication. There is nothing that amplifies anxiety like a lack of communication. 2) Have a frank and candid conversation with your investors about the source of their anxiety. 3) Get more face time with the rest of an investor’s firm. 4) Get some independent directors on your board. 5) Fix the problems in your business. Nothing helps to re… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
The Board Of Directors: Role and Responsibilities – AVC

Boards should not be controlled by the founder, the CEO, or the largest shareholder. For a Board to do its job, it must represent all stakeholders’ interests, not just one stakeholder’s interest.

Roy Bahat (Head at Bloomberg Beta)
Also, The trust thing

The investor-founder relationship is, by nature, out of balance. Founders are devoted to the most important (work) project of their lives; investors have the luxury of more than one such project at a time. Founders can do incredibly well personally, under circumstances where the investors may do fine though not great. Founders know much more about their company, investors know a little more about what’s happening elsewhere in the world (maybe).

Evan Schumacher (CEO of Going)
Tips for Startup CEOs

Every Friday have all your direct reports submit a “weekly update” one page or less focusing on progress against metrics, key accomplishments for the past week and summary of what’s on deck for the next week. Then, aggregate/consolidate/summarize those updates, add CEO level stuff, and forward to your board on Sunday night

David Jackson (Founder, Seeking Alpha)
Investors, VCs and product advice | A Founder’s Notebook

VCs add a ton of value, but not as product managers.

Slava Akhmechet (Founder at RethinkDB)
57 startup lessons

Most investor advice is very good for optimizing and scaling a working business. Listen to it. Most investor advice isn’t very good for building a magical product. Nobody can help you build a magical product — that’s your job.

David Jackson (Founder, Seeking Alpha)
VCs aren’t product managers | A Founder’s Notebook

VCs opinions about product shouldn’t have board member weight, but should be treated with the same weight as feedback from other committed users.

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Great Entrepreneurs Will Listen To You But Will Follow Their Own Instincts – AVC

Most of the time the entrepreneur will have a better feel for their product vision than the VC will. But there are times when what the entrepreneur is doing is not working and the VC will have to figure out how to get the entrepreneur to see that. I have learned to trust the entrepreneurs instincts until it is very clear I should not. Finding that line is art and not science and takes a lot of experience. And I still get it wrong from time to tim… (read more)

Mark Suster (Managing Partner at Upfront Ventures)
Download • Snapchat

Do a 20 minute google hangout catchup once a week with the investor [if they are not in your market]

David Jackson (Founder, Seeking Alpha)
For SaaS startups — how to avoid increasing costs inefficiently and prematurely | A Founder’s Notebook

A frequent VC error is to push companies to scale prematurely. If VCs want the money they put into a company to be deployed immediately and aggressively, and they have no experience of how to measure product quality, VCs may push to add sales people before the product is good enough.