Shifting Your Mindset: From Adversaries to Allies
Mark Suster brings a unique angle to board management. He spent 10 years as a CEO before switching to venture capital at Khosla Ventures. This dual perspective shapes his advice on treating boards not as distant overseers, but as partners invested in your growth.
Boards do have a legal duty to provide oversight for shareholders. Yet Suster reframes them as super connected free interns. These are influential people eager to contribute. They want to feel useful and stay involved. Few founders actually ask for their help, missing out on valuable input.
Think of board members like parents with unconditional love for your company. Their own success ties to yours. No one joins a board hoping to brag about failures to friends. They root for you, even while fulfilling oversight roles.
As your startup scales, views may clash on key choices like growth speed or risk levels. Founders should push boundaries and act boldly, without constant permission. But you must keep the board in the loop to maintain alignment.
This mindset builds deep trust. It lets you share tough issues, such as co-founder tensions or looming cash shortages.
- Turns board into a safe space for confidential talks on lawsuits or customer churn.
- Prevents adversarial vibes that pop up in rare meetings.
- Creates champions who promote your company outward.
One key quote captures it: "I can always get money, but where else can I get very connected and powerful people to do work for me?" Ask, and you'll unlock their potential.
The Continuous Board: Ditching the Waterfall Approach
Many founders run boards like outdated software projects, a "waterfall" model from Suster's early career days. You work in isolation for months, then cram updates into a short 2-3 hour meeting. Misalignment hits hard, just like a buggy software launch.
Board meetings feel like the main event, but they're often the least important part. Suster pushes for a continuous board instead. This means steady, frequent touchpoints that keep everyone engaged and informed.
Regular interactions build knowledge about your business. Board members become experts you can call for sensitive advice. Share worries about firing a senior leader or handling harassment claims. No one else offers that level of trust.
Frequent check-ins allow quick course corrections. They benefit you, your investors, and independent directors alike. Everyone stays aligned on strategy and execution.
To make it work, focus on proactive updates.
- Send financial metrics and progress reports often, so meetings skip basic questions.
- Build personal ties to smooth disagreements on topics like fundraising timing or profit focus.
- Ensure members prioritize your startup, even with busy schedules from other boards.
Watch for incentive mismatches, like a fund chasing quick exits while you aim long-term. Always put the company's needs first, above any fund or personal agendas.
This approach keeps boards highly engaged and knowledgeable. For more on avoiding waterfall pitfalls, check out Y Combinator's guide on how to create and manage a board. It offers templates for decks and meeting prep that complement continuous efforts.
Building a High-Functioning Board: People and Relationships First
Strong boards start with people who get along. When members know each other well, they resolve conflicts faster. Imagine investors clashing on growth versus profit; personal bonds help them find common ground.
Suster has seen boards where members ask the same basic questions meeting after meeting. It frustrates everyone. CEOs bear some blame here. Keep folks updated on finances and metrics ahead of time.
Engagement matters too. Board seats should fit their schedules, not distract from real priorities. Misaligned incentives hurt, like when one investor pushes for speed while another wants caution.
Fiduciary duty always points to the company, not individual funds. Founders must remember this in votes and decisions.
Key Traits of Effective Board Members
Look for these qualities in every member:
- Deep grasp of your business, from execution to metrics.
- Willingness to stay current, avoiding repeats in discussions.
- Balanced incentives that match your timeline and goals.
- Commitment to the company's best interest above all.
These traits turn a group into a team that supports tough calls.
Strategies to Foster Teamwork
Relationships seal the deal. Plan board meals, like lunches or dinners, to go beyond admin tasks. Not every meeting needs one, but they build rapport.
Host offsites with your executive team. Add social events to strengthen ties. This energy pays off when debates heat up.
Let investors chat alone sometimes. Founders often fear what they'll say, but it's healthy. They resolve issues among themselves, aiming for positive results, not plots against you.
Like parents, everyone wants your win. For ideas on keeping boards fresh, see best practices for startup boards. It stresses active participation and goal-setting, much like Suster's teamwork focus.
Personal connections ease fights over costs, revenue targets, or risk. They make your board a united front.
Evolving Your Board: From Founder Control to Independence
Boards change with your startup. In seed or A rounds, founders hold the reins. As you raise B or C, investors claim seats due to their duties.
Around the B stage, shift to an independent board. Suster calls this healthy. Founder control can lead to poor governance. Embrace it; don't fight every addition. Pick members wisely.
Corporate rules protect everyone. They add balance without stealing your voice.
Qualities of a Great Independent Board Member
Independents bring fresh eyes. Skip the big names; they rarely add hands-on value.
Prioritize these:
- Local presence for easy access and mentoring.
- Time to commit and stay involved.
- Role as honest broker in founder-investor spats.
- Startup experience, unlike public company vets.
- Skin in the game, like a $25,000 to $100,000 investment. It shifts their focus without breaking the bank.
A small check makes them care more. Hands-on help trumps fame every time.
For a founder's view on building these teams, read the founder's guide to startup board of directors. It covers finding the right people and how roles evolve.
Optimizing Board Meetings: Focus on What Matters
Board meetings can waste time on trivia. Present logo colors or lunch options, and watch debates drag 30 minutes. That's on you as CEO. Control the agenda.
Politely push back on off-topic dives. Note concerns for follow-ups. Rope in other members to keep disruptors in check.
Boards excel at big items: strategy, performance reviews, budgets, fundraising, M&A, and top hires or fires. Use one-on-ones for ops like pricing or stock grants.
Preparation and Agenda Tips
Prep sets the tone. Send materials 72 hours early, not the day before. Give time to absorb and think.
Follow up with CFO calls to field questions. This frees meetings for high-level talk, skipping why growth hit 18% instead of 24%.
Frame meetings on two axes: debate versus present, inform versus decide. Avoid "filibuster" sessions, 100-slide marathons that end with rushed consents. They overwhelm without input.
Opt for inform and debate. Share your direction, gather views, then decide. It involves them without binding votes. For approvals, just present and sign.
Investor rules matter too. Board votes lead to full approvals on rights like tag-along or drag-along. Know thresholds to read motivations.
Visualize it like this:
| Axis | Inform | Decide |
|---|---|---|
| Debate | Strategy sessions with input | M&A or senior hires needing buy-in |
| Present | Quick updates | Consent sign-offs |
This keeps things sharp.
A Smart Quarterly Structure
Meet four times a year max. Plan each for impact.
- Exec presentation meeting: Let senior leaders shine. It builds their ties to VCs and independents. They feel valued; members learn the team.
- Annual budgeting: Set next year's plan before January. Avoid February scrambles.
- Pure strategy: No updates or execs. Send a 10-page pre-read with charts, positioning, and three key issues. Come ready to discuss, not present.
- General review: Cover performance and adjustments.
Don't treat meetings as chores to endure. Use them to align champions. For cultivation tips, explore best practices for cultivating your startup board. It highlights skills balance and reviews that fit quarterly rhythms.
Understand governance flows: Board first, then investors. This predicts pushback on big moves.
Boards as Your Support System: Cheerleaders with Oversight
Boards play multiple roles. They cheer your wins and spread the word. They coach and mentor through challenges. Sometimes, they act like disappointed parents, stepping in if paths diverge.
Their identity links to your success. Failures sting them too. They never root against you.
Oversight creates tension during disagreements. Yet year-round management smooths it. Micro-adjustments prevent quarterly blowups.
Build this support to turn potential friction into collaboration.
Q&A Highlights: Chairman Roles and Board Diversity
Questions often hit on structure and mix. For chairmen, separate from the CEO if you can. In UK boards Suster joined, this was standard. In US startups, it's less common but helpful.
A chairman acts as super independent. They organize table opinions and prep hard choices. Think diplomacy: They proxy tough talks, like settling investor fights over raise sizes, saving your credibility.
Early investors might resist big risks if they can't follow on. Larger funds push for scale. A chairman bridges that without you fighting directly.
On expertise, no one covers everything, especially early. Diversity matters most. Seek varied thoughts through gender, ethnicity, education, geography, and domains.
Avoid echo chambers, like five similar backgrounds leading to one narrative. Mix brings richer ideas for complex paths.
Benefits include:
- Broader perspectives on challenges.
- Fewer blind spots in decisions.
- Stronger innovation from different views.
For leveraging diverse boards, see how to make the most of your startup board with Brad Feld. It dives into building great ones for maximum value.
Wrapping Up: Take Control of Your Board Today
Effective board management boils down to mindset, continuity, and focus. Shift from oversight fears to ally partnerships. Build continuous ties, pick engaged members, and structure meetings for real impact. Diversity and independence strengthen governance without losing your edge.
Apply these steps in your next interaction. Review your board composition or prep a pre-read. What one change will you make? Share in the comments, and thanks for reading.
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