Any startup that has successfully raised follow on funding (angel and beyond) is going to find itself with external investors to keep happy and to do this effectively requires some form of governance structure to be put in place. Achieving this is not actually that complicated but if you’ve never set up a startup Board before then it could feel like a daunting task.
Building a Board, and managing it effectively, is a key task for a startup CEO and founding team. Whilst no one will expect you to be an expert Board facilitator from day one, the way you manage your Board will be (to your investors) a reflection of how you manage your business. Your investors don’t sit with you in the office all day, so remember, it is at the Board meeting that they really see you at work. No pressure then! Actually there isn’t. Structured and managed well, a Board will add huge strategic value to your business and you should benefit from direct mentorship from your investors.
Why do you need a Board?
Credit to Mark Suster here who sums up perfectly the functions of an early-stage Board. This is a really important reminder that, when you choose your investor, you are not just taking the money but a whole lot more (or at least you should be).
How you build a Startup Board
My own mentor, himself and angel investor and Board Chairman at StudentFunder, told me that for him the perfect Board required a combination of experience, competence, personality and network. So how do you go about finding this expert mix? Here’s a few tips.
How do you manage a Startup Board
Managing your Board takes time so be prepared to factor this in. If you think you can turn up to a meeting once a month then you are missing the point of the meeting and neither you nor your investors will get value from it. Here’s some more advice for preparing for your Board meetings, and running and closing the meeting itself.
And here’s some final advice to remember (not necessarily from Warren Buffet himself).
Richard Hughes-Jones is The Boss at Firewerks. He is a trusted advisor to startups and organisations that support entrepreneurship. Drop him a line if you need help setting up and managing your Board. This article first appeared on his blog where you can view the full set of slides on Slideshare.