Setting expectations with investor directors is critical for your board, and you should expect the same from an investor whether or not he is a member of your board. This deck is for entrepreneurs as part of a series of observations and tips on building an effective board.
How to Set Expectations
With Investor Directors
by Brady Bohrmann,
Partner at Avalon Ventures
About Brady Bohrmann
Brady has over 20 years of experience as a venture capitalist and
operating executive in both information technology and biotech. His
focus is on early-stage investments and backing talented entrepreneurs.
Throughout his venture capital career, he has worked with over 75
companies. He currently is a director or observer of many Avalon
portfolio companies, including Backupify, Chart.io, Cloudant, Inc., Conjur,
Indix, Juliet Marine Systems, Kaltura, Kinvey, Memrise, Nanigans, Pingup,
Redbooth, Selectable Media, Simulmedia, The Happy Cloud, Twinstrata
This topic is Part 3 of a four-part
series by Avalon Ventures on
how to build an effective board.
Setting Expectations for
You should expect the same from an investor whether
or not he/she is a member of your board.
Deﬁning an Investor Director
In my experience, investor board members tend to
fall somewhere on a scale ranging from:
• Those that think you work for them (avoid this type)
• Those who understand that the best results occur
when they work in partnership with you (ﬁnd more
A Good Investor Director
A good director will make you a better CEO by
• How and when to challenge you
• How to avoid undermining you
They will publicly support your decisions, even if they
don’t fully agree with the choices you make.
A Good Investor Director
Your company will experience
tough times. You will want (and
deserve) investors that will dig in,
work hard, support you when
things aren’t going well, and not
run at the ﬁrst sight of blood.
Vet Your Investors
Do your homework before choosing a venture fund by
talking to as many people as you can to learn as
much as you can about the person(s) with whom you
will share the ups and downs of building your
This is the person who mistakenly believes that by
taking their fund’s money, you work for them.
Board meetings break apart into power struggles,
often to the point of the CEO seeking ways to work
around the dictator.
The Drive-by Director
This person consistently misses meetings, sends an
associate in his place, or worse, uses the meeting as
an update session to educate themselves about the
company or the industry.
Valuable time is wasted on justifying past actions or
conveying information your investor should already
The Stage Hog
These are the talkers and the agenda usurpers who
view the board meeting as their personal stage.
They stiﬂe productive conversation by consuming
valuable airtime in an effort to prove their knowledge
Typically designated by the founder or CEO, this
person tends to be passive and unwilling to disagree
with you, which would risk his relationship or his seat
on the board.
A board full of these types is a ticket on a high-speed
train to mediocrity.
This person would rather have your job than be a
director. They thinks they can run the company better
than you can.
At the very least, they are an eye-rolling distraction
and someone to weed out at the earliest
A person who lacks real-world company-building
experience and approaches the boardroom as a
Though they’re often charming and articulate, it’s best
to let them experiment with someone else’s
The Often Wrong (but never
in doubt) Investor
Typically, this is an investor director who is quick to
pull the trigger on advice by drawing from the
playbook they used in previous companies instead
of critically thinking about your company.
Experience is a great teacher, but it’s dangerous if
Over the years we’ve had the pleasure of working with some
great investor directors and observed how a bad director can
single-handedly poison the culture and derail a company.
The very best are great listeners and have an intuitive
understanding of how to adjust their style to the needs of
• One CEO may beneﬁt from a softer touch and Socratic
style of leadership
• Another may prefer a no-nonsense and right-to-the
The Next Area of
The next area entrepreneurs should consider when
building a board is how to run a great board meeting.
See our next deck, Choosing the Right Approach for
Running a Great Board Meeting.
Visit http://avalon-ventures.com/blog for more actionable advice
on early stage startups, VC funding and other entrepreneurial tips.