Startup CEOs: 5 Tips on Building a Strong Board
Advice abounds on the best ways to manage your startup board, but it’s becoming clearer and clearer that who you choose to be on your board is just as important as how you leverage them.
Selecting and including an independent director or two, even when you’re still small, can boost your startup’s success and help guide your company to greatness. We’ve collected five recommendations to help CEOs/founders as they build their startup board.
1. Increase your Perspective
Being a startup founder requires a laser-sharp focus on the problem your product or service is trying to solve. But sometimes, this single-mindedness can be a blessing and a curse. Chris Lema, VP of Product & Innovation at LiquidWeb recommends building a diverse board that provides an increased perspective, “helping you see the bigger context or picture, and alerting you to risks you might have missed.” By building a board with a range of genders, races, ages, thoughts and experiences, your company (and you, as CEO) are stronger.
TIP: It’s easy to miss things when you’re focused on creating a product/business, but “what you can’t see can hurt you” — a strong, diverse board can help.
2. Cultural Fit is Key
Experienced board member and theBoardlist founder Sukhinder Singh Cassidy reminds CEOs that it’s important to consider the cultural fit of any potential board member — especially when bringing on an independent director to an already functional board. “How much do you [as CEO] want to work with them?” This is “even more important than the rest of the board dynamics in my estimation.” She stresses that it is also valuable to consider cultural fit with other board members. Think about how your board interacts, the challenges they’ve faced, and how they’ve responded to it in the past.
TIP: Keep in mind what the potential new board member has to contribute/give to you individually and as part of the group.
3. Be Sure… Really, Really Sure
Intuit founder Scott Cook recently shared thoughtful, tactical advice he wish he had known before starting his now giant and successful company. In particular, he recommends startup founders are both selective and confident in their board member selections. His advice: “You need to be selective on who you allow on your board because even more than your spouse, you can’t get rid of them. Divorce is a formal procedure, unfortunately, and you can’t really do that with your board.” He recommends CEOs carefully consider their potential board members and: “Pick somebody whose advice you want, whose advice you just can’t get enough of.” Your board members will guide your company’s strategy and serve as your personal confidant, don’t get the choice wrong.
TIP: Like all early hires, who you select for your board can be crucial to your company’s success (and your own sanity) — be sure!
4. Find an Independent Thinker
VC and Angel Investor Brad Feld has written a lot about managing your startup board, he literally wrote the book about it. He highly recommends including independent (outside) board members for your early startup board, “I like to keep boards small and weighted toward outside directors as the companies grow, rather than just a cadre of VCs sitting around the board torturing the CEO with conflicting advice and opinions.” He recommends that CEOs find someone they like (see #2) who isn’t their buddy or a proxy for an investor already on your board. It’s not that VCs or friends of the CEO can’t be good board members, it’s just much better for the board (and the company) if it’s an independent thinker.
TIP: Take the time to recruit a qualified, thoughtful, independent director yourself. This person should have your company’s best interest in mind, not their portfolio or ego.
5. You Don’t Have to Get a Former CEO
A lot of startup founders think they have to find a board member with CEO experience, but depending on what sorts of challenges your company is facing, Sonya Brown, General Partner at Norwest Venture Partners recommends keeping your options open. “Presidents and General Managers of divisions of large corporate companies with P&L experience are often running large businesses within larger corporations.” Their experiences could be very insightful, depending on your business needs.
TIP: C-level experience is important, but not required to be a strong board member at your startup.
It’s not an easy decision, but most important ones in life aren’t.
We hope this framework makes planning during this uncertain time feel less like summoning a crystal ball and more like navigating with a map.
In this environment, it doesn’t matter if you’re the CEO of a startup or a well-established company—you’re going to have to make some difficult choices that will probably keep you up at night.