0
Best Practices in Meeting With and Managing Your
Startup Board
David Teten
Partner, ff Venture Capital
http://farm5.static...
Based in large part on research executed by NYU EEX Research Team, Spring 2012 term; and ff Venture Capital
interns Yong K...
Don’t Take Notes!
Download these slides
and get more free resources at:
ffvc.com/board
More resources at ffvc.com and tete...
ff Venture Capital (ffvc.com)
•  Early-stage technology venture capital fund based in New York
•  Founded 1999, with over ...
ff VC: 180+ investments in 70+ startups
Investments as of July 17, 2013
Only logos of active companies whose investment fr...
David Teten (teten.com)
• Partner, ff Venture Capital, early-stage technology venture capital fund
• Founder and Chairman,...
•  Research Findings
•  Discussing Your Hypotheses and Experiments
•  Sample Agenda and Notes
•  Recommended Reading
•  Ap...
Caveats
•  Focus your time on building your company, not building a pretty
deck for your board.
•  This presentation is de...
Key Findings
•  Keep it simple. Less is more.
•  More graphs, less text.
•  Demonstrate thoughtful analysis: Show unit eco...
Before the Meeting
•  Set an appropriate frequency and length for meetings. We recommend 2-3 meetings
per quarter at 2 to ...
During the Meeting
•  Prohibit smartphones /computers (tough to do!) and instead allow for email breaks
every hour, to rel...
After the Meeting
•  Get closure on each topic and allow for no ambiguity on who owns it.
•  Assign responsibility and exp...
Discussing Experiments
•  A “Startup” is an organization formed to search for a repeatable and
scalable business model1,2
...
Structure of Each Experiment
•  Hypothesis- "We believed [customer type] wants to [perform action/solve
problem/etc]."
•  ...
Sample Hypotheses and Experiments
15
Assumptions for Jersey Square [startup that allows people to rent sports
jerseys]:
• ...
16
•  Next Solution Hypothesis: Sports fans would like to donate invalid
jerseys to charity in exchange for discounts on s...
AGENDA: Recommendations
•  Include date
•  Decide who is Secretary taking notes. List attendees in person vs.
remote in th...
18
- It’s good to allocate time – and person responsible - for each section. Not
necessary to be explicit, but speakers sh...
AGENDA: Sample for 1st Board Meeting
after Closing a Venture Round
19
•  Decide who is Secretary (typically same person at...
Recommended Reading
Board Governance White Papers
(source: http://www.levp.com/news/whitepapers.shtml )
•  Working Group O...
Recommended Reading
•  Another Sample Board Deck and Investor Updates
http://resources.iaventures.com/
•  Steve Blank, “Wh...
Any questions ?
Slides at
ffvc.com/board/
Sign up for updates
at ffvc.com and teten.com
@ffvc @dteten
APPENDIX:
Sample Slides for Each Section of a Board Deck
23
h"p://farm1.sta.cflickr.com/164/413030324_3c0186f7cd_z.jpg	
  
CEO Update: Sample
24
Good structure here:
- Highlights
- Challenges
- Customer Feedback
- Goals
- Recruiting
•  Highlight...
25
Capitalization Summary
and Effect of Option Grants
25	
  
OPTION	
  LOG	
  DETAILS	
  
	
  Ves0ng	
  	
  
Employee	
  N...
2626	
  
Proposed Option
Grants
26	
  
Award	
  Summary	
  
Employee	
  Name	
  
	
  Total	
  Op0on	
  Shares	
  
Awarded	...
•  Structure product strategy summary: highlights, challenges
•  Include product roadmap and timeline
•  Highlight key pro...
PRODUCT STRATEGY: Sample
28
Good structure:
- Accomplishments
- Objectives
- Challenges
•  Accomplishments
•  Customer fee...
TECHNICAL INITIATIVES: Sample
29
Discuss Objectives, Accomplishments, and Challenges.
Clear labeling of what’s been done /...
•  Use visuals to highlight areas of strength and weaknesses
•  Call out who the person responsible for each metric is
•  ...
METRICS DASHBOARD: Sample
31Very helpful to call out pivotal dates.
More resources at ffvc.com and teten.com
•  Achieved 5% conversion in most
recent release of iOS app
•  $200 / day revenue achieved:
trailing 7-day average: X
•  P...
METRICS DASHBOARD: Sample
Cost per acquisition
33
Very good chart:
Shows historical trend
Explanations of major
shifts
Pro...
METRICS DASHBOARD: Sample
34
Cohort/retention
User Engagement
DEFINITELY track
user engagement
More resources at ffvc.com ...
METRICS DASHBOARD: Sample
Social media
35
More resources at ffvc.com and teten.com
•  Display the following fields (if relevant):
–  Prospect
–  Stage
–  Probability of closing
–  Age
–  Forecasted revenue...
PIPELINE: Sample
37
Customer Deal Size Pipeline Status % Close
Expected
Owner Age (in
weeks)
Total … … …
A … Negotiation 9...
•  Highlight key hires
•  Show relevant expenses
•  Calculate cost-per-hire (usually much higher than you think, taking
in...
RECRUITING: Sample
39
Name Posi0on Date Direct	
  Cost	
  (adver0sing,	
  recruiter,	
  relo) Social	
  Media
Bashful Jr.	...
•  Provide one page summary
•  DEFINITELY include cash burn + runway, as well as any necessary
explanations of unexpected ...
FINANCIAL OVERVIEW: Sample
41
Show key metrics that drive financial performance
Item Q1 2012 Q2 2012 Q3 2012 Q4 2012 YE 20...
FINANCIAL OVERVIEW: Sample
42
•  Spending [under/over] Plan by [$XX] in Q3 with savings/increase from
[ ] due in large par...
•  Include pricing strategy slide during major decision points
•  Articulate hypotheses (conversion rate, sales capacity, ...
REVENUE INITIATIVES: Sample
44
14-Day Free
Trial with …
launch
Release of …
UI tweaks
12X increase
More resources at ffvc....
REVENUE INITIATIVES: Sample
45
- Good use of graph, but chart legend difficult to read.
- Violates rule of one point per s...
46
Discuss: Lower entry price to expand base of paying users or increase perceived value?
•  Price elasticity testing
has ...
REVENUE INITIATIVES: Sample
Revenue bridge
47
More resources at ffvc.com and teten.com
Key Assumptions
•  Conservative sales projections:
–  Slow sales ramp
–  Lowest price point
–  Very little in-account grow...
•  Highlight areas that the board needs to discuss, including:
–  Future fundraising activity
–  Key recruiting needs
–  I...
Good slide:
Discusses important /
opportunistic upcoming
events
Provides board
opportunity to be helpful:
“You should meet...
ITEMS TO INCLUDE IN APPENDIX:
Recommendations
•  Suggested items to include:
•  Full financial statements
•  Org chart
•  ...
Any questions ?
Slides at
ffvc.com/board/
Sign up for updates
at ffvc.com and teten.com
@ffvc @dteten
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How to Manage and Present to Your Startup Board

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Best Practices in Startup Board Presentations
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David Teten
teten.com
@dteten

Published in: Business, Economy & Finance
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  • Just to be clear, I am not soliciting business by my postings. You are incorrect, Dick as to the need for attorneys to make sure all material facts are disclosed. I am certainly glad I don't represent you. Ask the SEC what they think, thank you.
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  • Pauls, I couldn't disagree more. Your comment is blatantly self serving and an entirely unnecessary expenditure, with the exception of meetings where a material legal issue may be on the agenda that warrants professional advice to the entirely of the Board.
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  • David, you miss a critical point by suggesting that attorneys only get involved with board meetings if there is an expectation of contention. Attorneys should be involved with the entire presentation to the board, including preparation and determination of material facts that need to be presented. Board members often are investors or conduits to investors. Companies need to take care to present all material facts to the Board. Companies need to comply with the SEC's Rule 10b-5 and state requirements when presenting to Boards. Also, attorneys need to be paid for these services. You suggest that attorneys may attend board meetings for startups for free. The truth is no attorney worth his or her salt is going to get involved with a client for free where securities matters are implicated. Either you get paid properly so you can do the job professionally, or you have to keep arms length. It is in the best interests of the companies, the board, the shareholders and the public that attorneys are properly retained to make sure material facts are disclosed and compliance maintained.
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Transcript of "How to Manage and Present to Your Startup Board"

  1. 1. Best Practices in Meeting With and Managing Your Startup Board David Teten Partner, ff Venture Capital http://farm5.staticflickr.com/4152/4962969492_bde3b662bf_b.jpg ffvc.com // @ffvc teten.com // @dteten More resources at ffvc.com and teten.com
  2. 2. Based in large part on research executed by NYU EEX Research Team, Spring 2012 term; and ff Venture Capital interns Yong Kwon, Columbia MBA ’13, and Matt Joyce, Dartmouth BS ’14. NYU student team lead and ff VC intern: Emil Lee NYU Stern MBA ’12. NYU Stern team: Alois Monger, Andreea Odangiu, Anthony Musso, Arjun Kathuria, Harsh Jiandani Best Practices in Meeting With and Managing Your Startup Board http://farm5.staticflickr.com/4152/4962969492_bde3b662bf_b.jpgMore resources at ffvc.com and teten.com
  3. 3. Don’t Take Notes! Download these slides and get more free resources at: ffvc.com/board More resources at ffvc.com and teten.com
  4. 4. ff Venture Capital (ffvc.com) •  Early-stage technology venture capital fund based in New York •  Founded 1999, with over 180 investments in over 70 companies •  First investments typically $100-$500K at valuations of <$5m pre-money •  50% of fund reserved for follow-on investments •  Prominent investments include: Cornerstone OnDemand (IPO); Quigo Technologies (sold to AOL for reported $340m); Klout; Voxy; 500px More resources at ffvc.com and teten.com
  5. 5. ff VC: 180+ investments in 70+ startups Investments as of July 17, 2013 Only logos of active companies whose investment from ff VC is publicly disclosed are shown.More resources at ffvc.com and teten.com
  6. 6. David Teten (teten.com) • Partner, ff Venture Capital, early-stage technology venture capital fund • Founder and Chairman, Harvard Business School Alumni Angels of Greater New York . Co-founded Venture Capital Access Program, introducing women and minority entrepreneurs to Harvard-affiliated angels • Lead author of first-ever research study on best practices in private equity/ venture capital deal origination • Lead author of first-ever research study on best practices of venture capitalists in increasing portfolio company value • Harvard MBA 1998, Yale BA • @dteten More resources at ffvc.com and teten.com
  7. 7. •  Research Findings •  Discussing Your Hypotheses and Experiments •  Sample Agenda and Notes •  Recommended Reading •  Appendix: Sample Slides Outline More resources at ffvc.com and teten.com
  8. 8. Caveats •  Focus your time on building your company, not building a pretty deck for your board. •  This presentation is designed to cover exhaustively all of the major issues that are typically addressed in board meetings. It is descriptive, not prescriptive. You should not think you are obliged to cover all these points. •  Optimally, spend your time building a proper management dashboard, and then you and your board can just look at that dashboard together. 8 More resources at ffvc.com and teten.com
  9. 9. Key Findings •  Keep it simple. Less is more. •  More graphs, less text. •  Demonstrate thoughtful analysis: Show unit economics. Illustrate decision-making process. Show that you’ve obtained background data from experts/industry contacts. •  Discuss failures and challenges explicitly. If you don’t discuss them while you’re in the room, the Board will discuss them when you’re not in the room. •  Always show accountability: Show prior commitments / budget, and your “SMART” plans (which are Specific, Measureable, Attainable, show who’s Responsible, and Time- bound”). •  No chartjunk/fancy formatting. Just dump Excel graphs into your slide. Read all of the books by Edward Tufte . •  Don’t use acronyms/jargon unless you’re 100% sure everyone will understand. Your board and other readers of your deck do not know your company as well as you do. •  Emphasize how the board can help: what do you need? 9 More resources at ffvc.com and teten.com
  10. 10. Before the Meeting •  Set an appropriate frequency and length for meetings. We recommend 2-3 meetings per quarter at 2 to 3 hours each at most for early stage companies, with lower frequency (down to quarterly) as the company matures. •  Talk with each board member to ensure you cover all topics that are relevant to each individual. •  Send out deck 2-3 days prior to allow for more discussion rather than simply an update meeting; information must flow both ways. •  Gain buy-in on anything controversial individually with each board member before the meeting. If you can’t get buy-in, at least prepare for a healthy discussion. •  Consider asking attorneys to be present, particularly in contentious meetings. Sometimes they won’t charge, as they view their presence as educational and relationship-building. •  Prepare a deck with a maximum of ten pages. You can include all other information in appendices/background reading. 10 More resources at ffvc.com and teten.com
  11. 11. During the Meeting •  Prohibit smartphones /computers (tough to do!) and instead allow for email breaks every hour, to relieve peoples’ email itch. •  Get administrative items out of the way first. Typical items include: minutes approval from the last meeting, review/approval of option grants, committee matters (such as audit, compensation, nomination, M&A), and anything else requiring a vote. Name a secretary for the meeting. •  Maintain clear goals for both the company and for the people in the room, and remind everyone throughout the meeting. Identify and start with the top strategic issues that really matter and give you insomnia. •  Remind people. Don’t assume that your board members remember the detailed facts you presented at the last meeting. Make sure relevant metrics are easy to find and compare against past performance and forecasts. •  Look forward. Most board meetings end up looking at the past because it’s easier. Embrace ambiguity and look forward. 11 More resources at ffvc.com and teten.com
  12. 12. After the Meeting •  Get closure on each topic and allow for no ambiguity on who owns it. •  Assign responsibility and expect results. Board members are there to help to you; you need to ask for it. •  Allow an executive session without the CEO, if appropriate. Step out of the room and allow the board to discuss internally right after the meeting. Step back in and ask for feedback – good and bad. •  Keep it social with a dinner before or after the meeting. 12 More resources at ffvc.com and teten.com
  13. 13. Discussing Experiments •  A “Startup” is an organization formed to search for a repeatable and scalable business model1,2 •  Systematically list and test your startup’s assumptions in order of successively decreasing risk •  Be explicit about your assumptions, how you will test them (the experiments), in what order, and what evidence will validate them •  Ask the board to challenge you on every point •  Set specific goals that the board can hold you to 13 1.  Steve Blank. Why Board Meetings Suck – Part 1 of 2. 2011, June 1. http://steveblank.com/2011/06/01/why-board-meetings-suck-%E2%80%93-part-1-of-2/ 2.  Steve Blank. What’s A Startup? First Principles. 2010, January 25. http://steveblank.com/2010/01/25/whats-a-startup-first-principles/ More resources at ffvc.com and teten.com
  14. 14. Structure of Each Experiment •  Hypothesis- "We believed [customer type] wants to [perform action/solve problem/etc]." •  Test- "We tested this hypothesis by running a [split test/customer interviews/landing page/concierge]. Our goal was to [insert target to hit for experiment to be validated]." •  Result- "The result was that [number success] out of [number tested] confirmed this hypothesis." •  Learning- "The key insight we gained from this experiment was [insert key insight].” 14 Source: Trevor Owens, Founder and CEO, Lean Startup Machine and Validation Board. For a one-page poster version of this, see ValidationBoard.com More resources at ffvc.com and teten.com
  15. 15. Sample Hypotheses and Experiments 15 Assumptions for Jersey Square [startup that allows people to rent sports jerseys]: •  Customer Hypothesis: Jersey value attached to standing of player in community •  Test: track jersey sales in wake of trades and scandals •  Result: validated •  Learning: sales tank when players are traded away or embarrass team—fans regret purchasing jersey •  Problem hypothesis: Jerseys derive primary value from use on game day •  Test: survey sports fans about when they wear jerseys •  Result: validated •  Learning: jerseys get 80% of their use on game day •  Solution Hypothesis: Sports fans recognize situational value of jersey and therefore would rather rent than buy •  Test: offer jersey rental as alternative to purchase •  Result: invalidated; only 2% opted to rent •  Learning: fans have emotional attachment to player and jersey More resources at ffvc.com and teten.com
  16. 16. 16 •  Next Solution Hypothesis: Sports fans would like to donate invalid jerseys to charity in exchange for discounts on sports tickets. •  Riskiest assumption: Sports fans will work with our proposed solution instead of taking the default option of dumping jersey in garbage / nearest charity bin. •  Method: Create simple landing page offering sports fans chance to donate jerseys to charity. •  Minimum success criterion: At least 2% conversion rate of signups for more information on the landing page. •  Results: In next board meeting. Sample of Future Hypothesis to Test More resources at ffvc.com and teten.com
  17. 17. AGENDA: Recommendations •  Include date •  Decide who is Secretary taking notes. List attendees in person vs. remote in the notes. •  5-7 Primary Sections for the meeting –  Order by priority and logic –  Include appendix (full financial statements, org chart, etc.) •  Maintain consistency in the structure every meeting •  Highlight urgent / time-sensitive items (and needs), so that board members have some advance notification to prepare thoughts •  Early in deck insert mission statement and objectives, to remind everyone and keep them aligned 17 More resources at ffvc.com and teten.com
  18. 18. 18 - It’s good to allocate time – and person responsible - for each section. Not necessary to be explicit, but speakers should have a general idea of how much time to allot to each section and avoid overruns. January 12, 2013: Board Update since [Prior board meeting date] Agenda Item Presenter Time (minutes) Official board business Entire board 5 CEO Update Moe 15 Product: Experiments, Strategy, Technical Initiatives Curley 50 Metrics Dashboard Larry 10 Pipeline / Business Development Larry 15 Recruiting Curley 5 Financials: Overview, Forecast Moe 10 Discussion Closed Board Session 30 Appendix NA TBD AGENDA: Sample More resources at ffvc.com and teten.com
  19. 19. AGENDA: Sample for 1st Board Meeting after Closing a Venture Round 19 •  Decide who is Secretary (typically same person at every meeting). •  Determine how to handle governance education for all members. •  Verify appropriate accounting processes in place •  Establish thresholds for board approval of actions (e.g., conflicts of interest, contracts other than day-to-day operations) •  Designate Audit Committee and Compensation Committee (or just individuals with those roles) •  Discuss profile of additional board members (if any) •  Determine frequency and schedule future board meetings (including annual CEO performance review and mutual board member assessment one year from now). Recommend monthly at first. •  Discuss how information for board will be shared and discussed, and which technology platform if any to use. (See links at end of deck for some ideas and recommendations.) •  Review management’s recommendation for KPIs and formal milestones •  Review draft budget (by 2nd meeting at latest date) More resources at ffvc.com and teten.com
  20. 20. Recommended Reading Board Governance White Papers (source: http://www.levp.com/news/whitepapers.shtml ) •  Working Group On Directory Accountability And Board Effectiveness , “A Simple Guide to The Basic Responsibilities of VC-Backed Company Directors” (MUST READ) •  Pascal Levensohn et al., "After the Term Sheet: How Venture Boards Influence the Success or Failure of Technology Companies” Books •  Brad Feld, Startup Boards: Reinventing the Board of Directors to Better Support the Entrepreneur •  Edward Tufte, all of his books •  Garry Reynolds, Presentation Zen •  Nancy Duarte, Slide:ology 20 More resources at ffvc.com and teten.com
  21. 21. Recommended Reading •  Another Sample Board Deck and Investor Updates http://resources.iaventures.com/ •  Steve Blank, “When the Boardroom is Bits” http://www.slideshare.net/sblank/when-the-boardroom-is-bits-052111 •  Fred Wilson, “The Board Of Directors: Board Meetings” http://www.avc.com/a_vc/2012/04/the-board-of-directors-board-meetings.html •  Brad Feld, “The Best Board Meetings” http://www.feld.com/wp/archives/2009/08/the-best-board-meetings.html •  Brad Feld, “The Best Approach to a Board Package” http://www.feld.com/wp/archives/2013/01/the-best-approach-to-a-board-package.html •  Mark Suster, “Running More Effective Board Meetings at Startups” http://www.bothsidesofthetable.com/2010/02/12/running-more-effective-board-meetings-at-startups/ •  Charlie O’Donnell, “A practical guide to a first board meeting: Advice from the pros http://www.thisisgoingtobebig.com/blog/2010/3/3/a-practical-guide-to-a-first-board-meeting-advice-from- the-p.html •  Will Herman, “Board Meetings – A CEO’s Point of View” http://www.2-speed.com/2006/11/board-meetings-a-ceos-point-of-view/ •  “Board Meeting Dos and Don’ts" http://pandodaily.com/2013/02/27/you-shouldnt-be-bored-at-a-board-meeting-pt-1-board-meeting-dos- and-donts/ 21 More resources at ffvc.com and teten.com
  22. 22. Any questions ? Slides at ffvc.com/board/ Sign up for updates at ffvc.com and teten.com @ffvc @dteten
  23. 23. APPENDIX: Sample Slides for Each Section of a Board Deck 23 h"p://farm1.sta.cflickr.com/164/413030324_3c0186f7cd_z.jpg  
  24. 24. CEO Update: Sample 24 Good structure here: - Highlights - Challenges - Customer Feedback - Goals - Recruiting •  Highlights •  Lessons from working with prospects •  Product message and positioning launch – Feb 21 •  Challenges •  3-12 month planning with capital concerns •  Safeguarding product roadmap •  Sales cycle time •  Customer highlights •  … feedback •  Key goals •  $300K in bookings by March 31 •  $ … down, $ … in pipeline for Q1 •  2 enterprise customers •  Nearly a dozen open conversations •  Employee updates •  Hired … co-founder of … on PT contract for sales strategy help •  Hired … experienced VP Marketing … on PT contract as fractional CMO More resources at ffvc.com and teten.com
  25. 25. 25 Capitalization Summary and Effect of Option Grants 25   OPTION  LOG  DETAILS    Ves0ng     Employee  Name   Award  Date    Employee   Award      Adviser  Award      Total  Op0on   Shares  Awarded      Op0on  Shares   Exercised      Op0on  Shares   Cancelled/ Returned      Balance     FD%  without   Unallocated   Op0ons   FD%  with   Unallocated   Op0ons   Ini0al  Tranche    BOY  (1)/  EOY   (2)      Term  for  Remaining  Ves0ng      Exercise  Price     Issued  Op0ons   Employee  A   3/15/2010    100,000      -­‐          100,000      25,000      -­‐          75,000     4.4%   3.0%   25.0%    2      48      months      $0.0100     Employee  B   6/1/2011    10,000      10,000      -­‐          10,000      -­‐         0.0%   0.0%   25.0%    1      8      quarters      $0.1000     Employee  C   9/1/2012    10,000      10,000      -­‐          -­‐          10,000     0.6%   0.4%   25.0%    1      8      quarters      $0.2000     Employee  D   12/31/2012    100,000      -­‐          100,000      -­‐          -­‐          100,000     5.8%   4.0%   25.0%    2      48      months      $0.2500     Employee  E    -­‐          -­‐          -­‐          -­‐          -­‐          -­‐         0.0%   0.0%   12.5%    1      -­‐          quarters     Employee  F    -­‐          -­‐          -­‐          -­‐          -­‐          -­‐         0.0%   0.0%   12.5%    1      -­‐          quarters     Total  Issued  Op0ons    200,000      20,000      220,000      25,000      10,000      185,000     10.7%   7.4%    Cumula0ve   Vested  Op0on   Shares      Cumula.ve   Vested  %   (excluding   unissued   op.ons)     Proposed  Op0on  Awards   Employee  G   3/15/2013    10,000      -­‐          10,000      -­‐          -­‐          10,000     0.6%   0.4%   12.5%    2      48      months      $0.5000     Employee  H   3/15/2013    -­‐          2,000      2,000      -­‐          -­‐          2,000     0.1%   0.1%   12.5%    1      8      quarters      $0.5000     Total  Proposed  Op0on  Awards    10,000      2,000      12,000      -­‐          -­‐          12,000     0.7%   0.5%   CEO Update: Sample More resources at ffvc.com and teten.com
  26. 26. 2626   Proposed Option Grants 26   Award  Summary   Employee  Name    Total  Op0on  Shares   Awarded     Award  Date   FD%  without   Unallocated  Op0ons   Issued  Op0ons   Employee  A    75,000     3/15/10   4.4%   Employee  B    -­‐         6/1/11   0.0%   Employee  C    10,000     9/1/12   0.6%   Employee  D    100,000     12/31/12   5.8%   Employee  E    -­‐         1/0/00   0.0%   Employee  F    -­‐         1/0/00   0.0%   Total  Issued  Op0ons    185,000     10.7%   Proposed  Op0on  Awards   Employee  G    10,000     3/15/13   0.6%   Employee  H    2,000     3/15/13   0.1%   Total  Proposed  Op0on  Awards    12,000     0.7%   Total  Issued  Op0ons    197,000     11.4%   Cumula&ve  Fully-­‐diluted  %  to  date   Remaining  Unissued  Op0ons  Available    768,000     Total  Op0on  Pool    965,000      -­‐         CEO Update: Sample More resources at ffvc.com and teten.com
  27. 27. •  Structure product strategy summary: highlights, challenges •  Include product roadmap and timeline •  Highlight key product initiatives –  Show analysis: unit economics, comps •  What metrics are you using to craft your strategy? •  Highlight mobile & social strategy (if relevant) •  Include customer feedback analysis and case studies (where relevant) •  Articulate your hypotheses PRODUCT STRATEGY: Recommendations 27 More resources at ffvc.com and teten.com
  28. 28. PRODUCT STRATEGY: Sample 28 Good structure: - Accomplishments - Objectives - Challenges •  Accomplishments •  Customer feedback process with 15 users •  Shortened proposal cycle to 1-day turnaround •  Created product collateral for major website update •  Objectives •  Work closely with Sales to align Product Roadmap with customer “asks” •  Ramp up to X salespeople •  Challenges •  Roadmap definition – “Where do we say no?” •  Supporting legacy product (decommissioning a dozen more APIs in February) More resources at ffvc.com and teten.com
  29. 29. TECHNICAL INITIATIVES: Sample 29 Discuss Objectives, Accomplishments, and Challenges. Clear labeling of what’s been done / what is to be done; Entrepreneurs tend to elide the difference. Key Technical Priorities for Q1 Progress Update Since Last Board Meeting •  Expand Hadoop Clusters for Pipeline & Serving •  Refactor & Enhance Data APIs •  Deliver Generic Topic system •  Supplement Twitter Collectors with Tokens •  Scale registered user data store beyond 1M users •  Launch Improved Scoring System Project (Maxwell) •  Deliver SLA Management System (w/ data quality) More resources at ffvc.com and teten.com
  30. 30. •  Use visuals to highlight areas of strength and weaknesses •  Call out who the person responsible for each metric is •  Show historicals: what were prior objectives? Did you meet them (why or why not?) •  Clarify when goals were set. •  Sample metrics: –  Site traffic –  User engagement –  User growth (by source) –  LTV –  CPA –  Viral Coefficient –  Cohort / Retention analysis –  Attrition / Churn –  Social media metrics METRICS DASHBOARD: Recommendations 30 More resources at ffvc.com and teten.com
  31. 31. METRICS DASHBOARD: Sample 31Very helpful to call out pivotal dates. More resources at ffvc.com and teten.com
  32. 32. •  Achieved 5% conversion in most recent release of iOS app •  $200 / day revenue achieved: trailing 7-day average: X •  Paid CPA reduction 16% (… to …) •  Improved 6-week retention by 265% (from … to …) METRICS DASHBOARD: Sample Lifetime Value 32 Key Drivers of Lifetime Value (LTV) 1) Acquisition User Growth Cost / Acquisition Acquisition by Source 2) Retention & Engagement Cohort Analysis Mobile Usage Social Media 1) Monetization Premium User Growth Conversion Product Mix Return on Marketing High-level Insights More resources at ffvc.com and teten.com
  33. 33. METRICS DASHBOARD: Sample Cost per acquisition 33 Very good chart: Shows historical trend Explanations of major shifts Provides absolute #s at the bottom for reference Blended Mobile CPA  …          …                …                    …                        …   More resources at ffvc.com and teten.com
  34. 34. METRICS DASHBOARD: Sample 34 Cohort/retention User Engagement DEFINITELY track user engagement More resources at ffvc.com and teten.com
  35. 35. METRICS DASHBOARD: Sample Social media 35 More resources at ffvc.com and teten.com
  36. 36. •  Display the following fields (if relevant): –  Prospect –  Stage –  Probability of closing –  Age –  Forecasted revenue opportunity –  Timeline •  Include prior forecast vs. actuals for all relevant fields PIPELINE: Recommendations 36 More resources at ffvc.com and teten.com
  37. 37. PIPELINE: Sample 37 Customer Deal Size Pipeline Status % Close Expected Owner Age (in weeks) Total … … … A … Negotiation 90 Q1 … 10 B … Negotiation 90 Q1 … 7 C … Proposal 75 Q2 … 7 D … Value Prop 50 Q1 … 3 E … Needs Analysis 20 Q1 … 4 F … Needs Analysis 20 Q2 … 10 G … Needs Analysis 20 Q2 … 7 H … Qualification 10 Q2 … 18 I … Qualification 10 Q2 … 2 J … Qualification 10 Q2 … 1 More resources at ffvc.com and teten.com
  38. 38. •  Highlight key hires •  Show relevant expenses •  Calculate cost-per-hire (usually much higher than you think, taking into account your time) •  Provide forecast for future recruiting plans •  Link to social media presence (e.g., LinkedIn) RECRUITING: Recommendations 38 More resources at ffvc.com and teten.com
  39. 39. RECRUITING: Sample 39 Name Posi0on Date Direct  Cost  (adver0sing,  recruiter,  relo) Social  Media Bashful Jr.   Engineer 4/18/2012 $2350 Linkedin.com/in/bashful Doc Backend 4/22/2012 $1350 Linkedin.com/in/doc Dopey Jr.   Engineer 5/9/2012 $850 Linkedin.com/in/dopey Grumpy UI 7/14/2012 $850 Linkedin.com/in/grumpy Happy Sales Projected $2850   Linkedin.com/in/happy Sleepy Sales Projected $2350   Linkedin.com/in/sleepy Sneezy QA Projected $2850 Linkedin.com/in/sneezy More resources at ffvc.com and teten.com
  40. 40. •  Provide one page summary •  DEFINITELY include cash burn + runway, as well as any necessary explanations of unexpected variances •  Include future forecasts for cash balance; performance to budget; and forecasted revenue and operating expense summary (with key drivers and assumptions) •  Do not include full financial statements – put those in appendix •  Most companies are required to have board-approved budget by November 30, so present budget for formal approval. FINANCIAL OVERVIEW: Recommendations 40 More resources at ffvc.com and teten.com
  41. 41. FINANCIAL OVERVIEW: Sample 41 Show key metrics that drive financial performance Item Q1 2012 Q2 2012 Q3 2012 Q4 2012 YE 2012 Sales - TCV … … … … … Recognized Revenue … … … … … CMRR … … … … … # New Customers … … … … … Cash on Hand … … … … … Salaries & Commissions … … … … … Operating Expenses … … … … … Total Headcount … … … … … More resources at ffvc.com and teten.com
  42. 42. FINANCIAL OVERVIEW: Sample 42 •  Spending [under/over] Plan by [$XX] in Q3 with savings/increase from [ ] due in large part to [ ] •  Cash balance [behind/ahead of] Plan by $[ ] at $[ ] and projected to be $[ ] at end of Q4 compared to Plan of $[ ] •  Ended Q3 with total workforce of [ ] ([ ] employees, [ ] contractors) •  Current monthly cash burn at $[ ] which, at this level and no revenue offset, would deplete cash balance by [ ] •  Cash burn projected to [decrease/increase] to $[ ] by end of Q4 after (explanation], which would deplete cash balance by [ ] Source: Philip Dunkelberger More resources at ffvc.com and teten.com
  43. 43. •  Include pricing strategy slide during major decision points •  Articulate hypotheses (conversion rate, sales capacity, etc.) •  Keep a brainstorming list of additional revenue streams, but don’t act on more than 1-2 of them. REVENUE INITIATIVES: Recommendations 43 More resources at ffvc.com and teten.com
  44. 44. REVENUE INITIATIVES: Sample 44 14-Day Free Trial with … launch Release of … UI tweaks 12X increase More resources at ffvc.com and teten.com
  45. 45. REVENUE INITIATIVES: Sample 45 - Good use of graph, but chart legend difficult to read. - Violates rule of one point per slide …   …   …   …   …   …   …   More resources at ffvc.com and teten.com
  46. 46. 46 Discuss: Lower entry price to expand base of paying users or increase perceived value? •  Price elasticity testing has been inconclusive •  Lowering price by 38% increased revenue by 57% •  Similar price changes in Germany had 0 impact on revenue •  Launch of 1-year plan had immediate and strong uptake •  Product X currently being positioned as higher- price product Pricing and offer strategy … REVENUE INITIATIVES: Sample More resources at ffvc.com and teten.com
  47. 47. REVENUE INITIATIVES: Sample Revenue bridge 47 More resources at ffvc.com and teten.com
  48. 48. Key Assumptions •  Conservative sales projections: –  Slow sales ramp –  Lowest price point –  Very little in-account growth in 2012 •  Hires: 2 Sales, 1 Tech by end of Q1; all other hiring is trigger-based •  Motorola stays in all year, as is – same staffing and cash FORECAST: Sample 48 - Show key assumptions - This slide lacks numbers: what is a “slow” sales ramp? - What analysis proves the assumption is “slow” or the price point is “low”? More resources at ffvc.com and teten.com
  49. 49. •  Highlight areas that the board needs to discuss, including: –  Future fundraising activity –  Key recruiting needs –  INCLUDE items company needs help from board with. Assign tasks to your board members and build accountability and engagement. –  Examples: top customer prospects, business development leads and other companies you would like to meet •  Sample questions –  “What is the ideal business model for our company?” –  “Can we be in two businesses at the same time?” –  “Do we need to build, own, and operate our payments system to be successful long term?” –  “Can we build a sustainable business long term operating solely on Facebook?” BOARD DISCUSSION: Recommendations 49 More resources at ffvc.com and teten.com
  50. 50. Good slide: Discusses important / opportunistic upcoming events Provides board opportunity to be helpful: “You should meet Reid in San Francisco.” BOARD DISCUSSION: Sample 50 •  CEO & Fundraising Discussion •  Ideal path: Bridge -> CEO Search -> Series B •  Would look for executive with enterprise sales experience (e.g. selling to Sears) •  Enterprise Roadmap and Vision •  Q3 & Q4 Planning •  Bay Area Trip •  Investor meetings scheduled: … •  Targeting: … •  Customer meetings scheduled: … •  Targeting: … More resources at ffvc.com and teten.com
  51. 51. ITEMS TO INCLUDE IN APPENDIX: Recommendations •  Suggested items to include: •  Full financial statements •  Org chart •  Cap table •  Case studies •  Customer feedback •  Additional detail (#s, assumptions) supporting 1-page summaries in the main body of the board book 51 More resources at ffvc.com and teten.com
  52. 52. Any questions ? Slides at ffvc.com/board/ Sign up for updates at ffvc.com and teten.com @ffvc @dteten
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