What’s the best way to structure your board?

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Independent Directors – AVC

The biggest piece of advice I give to entrepreneurs on the topic of boards is to get some independent directors on their board. Ideally these would be peer CEOs who have a lot of experience building and managing companies.
Recruiting board members takes time. Most entrepreneurs prefer to recruit people who work for them and can impact the day to day effectiveness of their organizations. And so they prioritize that.

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

Once a board member is on, it’s nearly impossible to get them off. It’s quite painful, it’s like going to Vegas, getting married without a pre-nup and never being able to get divorced.

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.

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

Personally, I think the ideal board structure for most early-stage companies is a 5-member board with 2 founders, 2 investors, and one outsider. I think a 4-member board with 2 founders, 1 investor and 1 outsider is also good (in practice, the even number is almost never a problem).

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

I’ve been serving on boards for 25 years. I’ve been in every conceivable configuration. To my mind, the perfect board is either five or seven and it looks like this: Founder CEO, Two Independents, Two Investors
. Founder CEO, Three Independents, Three Investors. If the Founder is no longer the CEO, then I like this configuration: CEO, Founder, Two Independents, Three Investors

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Who You Want On Your Board – AVC

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 a… (read more)

Fred Wilson (Co-Founder and Partner at Union Square Ventures)
Who You Want On Your Board – AVC

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.

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)