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Creating a Great Board of Directors

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QStream CFO David Stack brings his years of experience working with startups to explaining how a young company should choose a board of directors that can be most effective. Story originally published on David-Stack.com

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Creating a Great Board of Directors

  1. 1. Creating a great board of directors F O R Y O U R S T A R T U P B Y Q S T R E A M C F O D A V I D S T A C K
  2. 2. Start early While establishing a board of directors is required by law when startups begin looking to raise outside capital, it’s a good idea to build the board framework early on, because it signals to potential investors that you’re serious about success. “While you’ll often get advice to just have a ‘board of advisers’ at the beginning, I’ve found that the formality of a board of directors is helpful to the entrepreneur by creating an additional level of commitment from the directors.”
  3. 3. Think long Choose advisors whose past experience can influence where you’d like your company to be in six months, a year, two years—you get the idea. Seek out directors with experience scaling growth and revenue, rather than ones who may have previously only worked with early stage startups.
  4. 4. Leverage your networks Leverage your investors’ networks, too: like all relationships, creating a good Board of Directors requires chemistry that’s best honed in real life, by cultivating word of mouth recommendations or existing relationships. Even if your startup is built entirely in the cloud, keep your feet on the ground with real life advisor relationships that you can trust. 
  5. 5. ...by addressing your weaknesses. If product design or business development are your strengths, great, but you’d do well to seek out seasoned experts in raising capital, advising investors, and any of the other key factors to startup success that are not your forte. Fill your weak spots PLAY TO YOUR STRENGTHS 4 1
  6. 6. Consider culture Not all startups are founded by your stereotypical jeans and t-shirts wearing computer genius types. While many startups embrace a more laid back work culture, your board members should create harmony with the personalities and values of startup founders.
  7. 7. Embrace Change Successful startups change fast. Ideally a board of directors keeps pace with dynamic changes and continues to advise your startup accordingly, but realize that changes to the board are normal in startup territory. As your startup grows, so too should your board. And as your board grows, the individual stake and voting power of each member decreases, meaning it’s essential that every member of the board act with the company’s best interests in mind. Board members might step down as the company grows in a new direction or receives new rounds of funding.
  8. 8. @DavidStack33 Q S T R E A M C F O D A V I D S T A C K D A V I D - S T A C K . C O M

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