Building a Board
He dispelled some misconceptions that our entrepreneurs held about the purpose of board members, saying that “the role of the board is to help you solve the problems you want to solve and raise issues you may not be thinking about.” The majority of boards only hold as much power as the company gives them. Many board members for startups work without equity or compensation first, although Professor Charm was hesitant to make broad statements about what people generally agree to. He mentioned that this is largely dependent on geographic location.
Wondering how to put an advisory board together? First, identify what you need. The best members are those who care about your success and possess expertise in areas you would like assistance with. Tell everyone that you’re looking for board members and clarify the skills that you are in search of. Keep in mind that well-known names, on their own, do not make good board members. Look for people who are willing to collaborate with others. Consider that initially, early-stage companies should have boards consisting of only two members, other than you. Add two more spots once you receive funding; your investor will likely want at least one seat.
Once you have your board, you will need to prepare for board meetings. Meetings should be held at the same rate at which your company experiences major change, such as a pivot or refinancing, but should not become less frequent than once a quarter. Keeping relatively constant contact increases engagement between the board and your company. Meetings should run between two and four hours, ideally three. Spend no more than the first 30 minutes discussing past financial documents, then move on to the issues you want help with. Afterwards, open up the floor. Ask your board members if there is anything they believe should be discussed. Over time, consider bringing in people who report directly to you to speak briefly. Finally, ask the board if there are any last comments before concluding the meeting.
Although building a board is not a top priority for many startups, Professor Charm emphasized the importance of this support system. His advice was extremely helpful for the Summer Venture Program teams, and we hope it was helpful for you too!
Hear from the 2016 Summer Venture Program Wellesley cohort on Thursday, July 28 at the Summer Venture Showcase!