Managing Director of Avalon Ventures, Brady Bohrmann, shares powerful insights to build an effective board of directors, how to choose your board members, how to run an effective meeting and more.
A board of directors requires professionals with a diverse mix of managerial, functional, and other specialized knowledge in order to properly advise and oversee management.
This Quick Guide reviews the process by which companies select, compensate, and evaluate board members.
It answers such questions as:
• How are qualified directors identified?
• What skills and experiences are needed?
• How are directors paid?
• How are directors evaluated?
• How are “bad” directors removed?
For an expanded discussion, see Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences (Second Edition) by David Larcker and Brian Tayan (2015): http://www.gsb.stanford.edu/faculty-research/books/corporate-governance-matters-closer-look-organizational-choices
Buy This Book: http://www.ftpress.com/store/corporate-governance-matters-a-closer-look-at-organizational-9780134031569
For permissions to use this material, please contact: E: corpgovernance@gsb.stanford.edu
Copyright 2015 by David F. Larcker and Brian Tayan. All rights reserved.
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series: Board of Directors Boot Camp 2021.
See more at https://www.financialpoise.com/webinars/
A board of directors requires professionals with a diverse mix of managerial, functional, and other specialized knowledge in order to properly advise and oversee management.
This Quick Guide reviews the process by which companies select, compensate, and evaluate board members.
It answers such questions as:
• How are qualified directors identified?
• What skills and experiences are needed?
• How are directors paid?
• How are directors evaluated?
• How are “bad” directors removed?
For an expanded discussion, see Corporate Governance Matters: A Closer Look at Organizational Choices and Their Consequences (Second Edition) by David Larcker and Brian Tayan (2015): http://www.gsb.stanford.edu/faculty-research/books/corporate-governance-matters-closer-look-organizational-choices
Buy This Book: http://www.ftpress.com/store/corporate-governance-matters-a-closer-look-at-organizational-9780134031569
For permissions to use this material, please contact: E: corpgovernance@gsb.stanford.edu
Copyright 2015 by David F. Larcker and Brian Tayan. All rights reserved.
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series: Board of Directors Boot Camp 2021.
See more at https://www.financialpoise.com/webinars/
This session covered:
- What do we mean by governance?
- What does it mean for NEDs?
- Main points from ‘Boardroom Behaviours’ and ‘Board - Effectiveness Guidance’ reports
- Good (and bad) governance – can it deliver value/prevent loss?
- Benefits of perceptive governance
The role of the Non-Executive Director can appear to those sitting outside of Boards to be shrouded in secrecy. What is a Non-Executive Director? What do they do? And why be a Non-Executive Director?
Jointly in our roles advising the Boards of a range of organisations, and the Directors who sit on them, we
are often asked what information a new Non-Executive Director should be aware of. Through combining our experience and perspective in providing Board advice, we have attempted to provide a Guide that answers both the ‘obvious’ questions to ask and issues to be aware of, together with the detail and summary of the working mechanics of the Board and the key legislation Non-Executive Directors need to understand.
Independent Fund Directors - Hedge Fund GovernanceBell Rock Group
This guide provides a summary of the attributes to look for when appointing directors to the board of investment funds. It also raises a number of questions to ask when deciding on board composition for a hedge fund. Hedge fund governance should be an area of focus by investors as it is important that those tasked with overseeing the activities of the fund structure are suitably qualified, experienced and add real value to the board of the investment fund.
Discover how to make your Board of Directors a dynamic, supportive group of volunteers. This webinar cover the basics of the book The ABCs of Building Better Boards. It will motivate and inspire volunteers and staff to raise the bar for performance for the Board of Directors.
Responsibilities of Directors Workshop presented by Peter Stewart & Professor...Coleman Greig Lawyers
Presented by internationally recognised specialist in corporations law, Professor Michael Adams and Coleman Greig's Principal Peter Stewart, they covered the key responsibilities of Directors in the recent workshop hosted at Coleman Greig Parramatta.
Understanding the Purpose of Your Board of DirectorsAvalon Ventures
This deck is for entrepreneurs as part of a series of observations and tips on building an effective board. This is Part 1. In its simplest form, the board of directors is a group of elected or appointed members charged with the responsibility of overseeing your company’s activities.
• Learn from one of the world’s experts the latest trends that board directors need to know.
• Know your liabilities as a board director and review your approach to risk.
Internal and external institutions and influences of corporateGrace Fatima Abelida
Corporate governance refers to the mechanisms, relations, and processes by which a corporation is controlled and is directed. It involves balancing the many interests of the stakeholders of a corporation. Thus, it is important to know and determine what are the internal and external institutions and influences of a corporate governance.
Nonprofit Board of Directors Best Practices Grace Dunlap
In this 1-hour webinar hosted by CharityNet USA, we review the 20 best practices for nonprofit board of directors. For more information on nonprofit startup, visit: charitynetusa.com/nonprofit_startup.php
With the arrival of SharePoint 2013 on the market and the push for Office 365, many are planning to make the move on to this new version of SharePoint. I consider myself lucky to have already participated to a few of these so far. Often, I come across some challenges in the organization surrounding this upgrade. I thought I would put up this post and hopefully some of you will continue the reasons a migration can fail through the comments.
This session covered:
- What do we mean by governance?
- What does it mean for NEDs?
- Main points from ‘Boardroom Behaviours’ and ‘Board - Effectiveness Guidance’ reports
- Good (and bad) governance – can it deliver value/prevent loss?
- Benefits of perceptive governance
The role of the Non-Executive Director can appear to those sitting outside of Boards to be shrouded in secrecy. What is a Non-Executive Director? What do they do? And why be a Non-Executive Director?
Jointly in our roles advising the Boards of a range of organisations, and the Directors who sit on them, we
are often asked what information a new Non-Executive Director should be aware of. Through combining our experience and perspective in providing Board advice, we have attempted to provide a Guide that answers both the ‘obvious’ questions to ask and issues to be aware of, together with the detail and summary of the working mechanics of the Board and the key legislation Non-Executive Directors need to understand.
Independent Fund Directors - Hedge Fund GovernanceBell Rock Group
This guide provides a summary of the attributes to look for when appointing directors to the board of investment funds. It also raises a number of questions to ask when deciding on board composition for a hedge fund. Hedge fund governance should be an area of focus by investors as it is important that those tasked with overseeing the activities of the fund structure are suitably qualified, experienced and add real value to the board of the investment fund.
Discover how to make your Board of Directors a dynamic, supportive group of volunteers. This webinar cover the basics of the book The ABCs of Building Better Boards. It will motivate and inspire volunteers and staff to raise the bar for performance for the Board of Directors.
Responsibilities of Directors Workshop presented by Peter Stewart & Professor...Coleman Greig Lawyers
Presented by internationally recognised specialist in corporations law, Professor Michael Adams and Coleman Greig's Principal Peter Stewart, they covered the key responsibilities of Directors in the recent workshop hosted at Coleman Greig Parramatta.
Understanding the Purpose of Your Board of DirectorsAvalon Ventures
This deck is for entrepreneurs as part of a series of observations and tips on building an effective board. This is Part 1. In its simplest form, the board of directors is a group of elected or appointed members charged with the responsibility of overseeing your company’s activities.
• Learn from one of the world’s experts the latest trends that board directors need to know.
• Know your liabilities as a board director and review your approach to risk.
Internal and external institutions and influences of corporateGrace Fatima Abelida
Corporate governance refers to the mechanisms, relations, and processes by which a corporation is controlled and is directed. It involves balancing the many interests of the stakeholders of a corporation. Thus, it is important to know and determine what are the internal and external institutions and influences of a corporate governance.
Nonprofit Board of Directors Best Practices Grace Dunlap
In this 1-hour webinar hosted by CharityNet USA, we review the 20 best practices for nonprofit board of directors. For more information on nonprofit startup, visit: charitynetusa.com/nonprofit_startup.php
With the arrival of SharePoint 2013 on the market and the push for Office 365, many are planning to make the move on to this new version of SharePoint. I consider myself lucky to have already participated to a few of these so far. Often, I come across some challenges in the organization surrounding this upgrade. I thought I would put up this post and hopefully some of you will continue the reasons a migration can fail through the comments.
Over the course of my career, I’ve sat on a number of small-company boards. Looking back, it would have been nice if the managing directors had a baseline dashboard they could riff off of so as not to waste so much time on dash boarding.
So the purpose of this document is to offer a baseline template dashboard that a start-up firm could use to update the board of directors. All the data would need to be filled in with real data, of course. And, the dashboard would have to be customized to meet the reporting requirements and operational uniqueness of the business. That said, baselines can save time and spark thought-threads.
Remember that reporting should be for the sake of strategic enlightenment and to drive transparent discussions, and not for the sake of reporting.
If anyone out there has some additional points of data they use effectively in their small-business management reporting , I’d love to hear about it!
Understanding financial statements for non-financial managers and executivesKenny Goh
This was a presentation I delivered to a group of department heads and editors of a publishing company (specialising in scientific, technical, and medical books and journals). I've redesigned some slides in this publication.
The cycle of innovation and iteration that digital is known for means existing concepts can suddenly find radically new trajectories. In this report, we highlight ten ideas that have been gaining rapid traction, and which will reshape how we digitally interact with the world around us.
The Time of Makers. How to Get out of Digital World and Create Physical Produ...IT Arena
Lviv IT Arena is a conference specially designed for programmers, designers, developers, top managers, inverstors, entrepreneur and startuppers. Annually it takes place on 2-4 of October in Lviv at the Arena Lviv stadium. In 2015 conference gathered more than 1400 participants and over 100 speakers from companies like Facebook. FitBit, Mail.ru, HP, Epson and IBM. More details about conference at itarene.lviv.ua.
In 2012-13, Kent School worked with parents and community to build a hill in their back field to promote outdoor play. This is the highlights presentation to the Board of Education of Fraser-Cascade School District.
Marcus Chantrey, Go Green December Business Breakfast, St Mary Redcliffe Chur...Go Green
Marcus Chantrey from B2 Architects explains St Mary Redcliffe's green initiatives and the design competition launched as part of its redevelopment project.
How To Set Expectations With Investor DirectorsAvalon Ventures
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.
Choosing The Right Approach For Running A Great Board MeetingAvalon Ventures
There are many different ways to run a board meeting, and it’s important to choose a style and approach that works best for you. It’s important to talk to other CEOs to learn what has worked best for them. It may also be useful for you to consult with the other directors on your board to understand their preferences. The frequency and structure of your board meetings will need to evolve as the business grows and becomes more complicated, more formal, and harder to manage. This deck is for entrepreneurs as part of a series of observations and tips on building an effective board.
The Entrepreneur's Guide to Composing Your BoardAvalon Ventures
This post is for entrepreneurs as part of a series of observations and tips on building an effective board. Some of the first—and most important—decisions you will make when raising venture capital involve negotiating the size and composition of your board. In this deck, Brady Bohrmann of Avalon Ventures provides top advice.
Roles & Responsibilities: A Primer (Series: Board of Directors Boot Camp 2020...Financial Poise
Private company owners, including family businesses, ESOPs, and private equity owners, often have different expectations for their boards than is common in publicly traded firms. Besides being much less encumbered by regulatory compliance, many private firms are looking for a completely different kind of engagement from directors. In companies with new boards, leaders and directors often struggle early on to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success.
To listen to this webinar on-demand, go to: https://www.financialpoise.com/financial-poise-webinars/roles-responsibilities-a-primer-2020/
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series:
BOARD OF DIRECTORS BOOT CAMP 2022
See more at https://www.financialpoise.com/webinars/
Whether you are considering forming a board or want to enhance existing governance practices, understanding the role of the board and expectations of directors is an essential ingredient to successful, value-added governance in private companies. Company leaders and board directors often struggle to determine the role of the board and how to separate board responsibilities from those of ownership and management. In this webinar, the audience will learn what companies are really looking for (or should be) from their boards, and the many ways that boards contribute to private company success. We will cover the definition of a board, typical expectations of a director, board oversight vs. management responsibilities, and many other basics of board formation and operation.
Part of the webinar series: Board of Directors Boot Camp 2022
See more at https://www.financialpoise.com/webinars/
Advisory Boards have many uses. In the US in certain Startups they can be more important than formal Boards. In the UK some Startups are so "owned" by investors/VCs that they are too "narrow" and an Advisory Board complements this gap. For ListedCos around the world the weight of not investors but Statist Corporate Governance can crowd-out Corporate Creativity so many listeds create them to offset that imbalance. Partnerships can be too introverted. There are so many use cases we perhaps should all have them! In a few slides we address 5 Simple Questions - Why? What? Who? How? and Challenges?
Getting the return you want how some very successful pe investors build thei...Leslie S. Pratch
This edition examines what you as a private equity investor can consider as approaches to make the boards of your companies work more effectively. It is the result of initial conversations with 12 experienced private equity investors and board members. If you are an experienced board member, you may agree, disagree or have another perspective on the topics discussed. If you share those ideas with me, I will try to share them with others in future editions. If you are less experienced as a board member, you may also have some additional thoughts, and likely will have much to learn from the experts sharing their wisdom.
How to attract (and hire and keep) a capable portfolio company ceoLeslie S. Pratch
Sometimes private equity firms have trouble landing the CEO of their dreams. The firm identifies him or her (or thinks it has) but then the candidate chooses not to pursue the opportunity or even turns down the offer. While some of the blame may fairly belong to a search firm, much of the blame may belong to the private equity firm. You may not be doing everything you can to be attractive to the best CEOs. And even if you haven't had a problem, you might have some room for improvements that could help you, your CEOs and your investors.
How to get what you want (and move -- fast -- when you don't)Leslie S. Pratch
Not everyone is equally good at all parts of the "private equity person" role – some investors are better at sourcing deals, buying companies, or raising money than at being director or leading the Board. To be great at guiding portfolio companies, you need to know when and how to work with a CEO who will not always (or maybe ever) be pleased with the Board. Getting each party to do their part in achieving the aims of the investors – a job they must do together – benefits from planning, skills, and knowledge.
Thoughts on Board of Directors, Advisors and Consultants for start-ups. What should be the composition? What should be the engagement model? How to get the most out of them? What is expected in return? *** Note: this is not, in any way, a legal document or a document that reflects on laws in the US or in other countries ***
Steer towards success: What very successful portfolio company boards doLeslie S. Pratch
In our previous edition, we began to look at how you can design and fill the boards of your companies so they will be more effective. This edition shifts attention to board processes. Board processes exist to help the company reach its goals. First, we’ll examine how boards organize their activities. Then we’ll look at how board members actually behave in and between board meetings to support the company’s achieving its goals, and how to build the trust that facilitates good interactions between the board and management. The purpose of board processes is to encourage good board behavior to happen, but sometimes bad behavior still happens, and drastic action may be required.
Silicon Catalyst presents Ryan Howard on Protecting Yourself as a Startup Fou...lpchao
Silicon Catalyst, the startup incubator and accelerator for semiconductor solutions, is proud to present serial entrepreneur and startup founder Ryan Howard for a seminar on how startup founders can protect themselves when building their company. The event was held at Wilson Sonsini in Palo Alto, California on September 21, 2016.
A seasoned entrepreneur, Ryan Howard shares some of the common pitfalls many founders face when ramping up a new company. He offers tips for how to mitigate these risks and pitfalls as well as best practices on building a cohesive team and board. Ryan also shares pointers on early stage funding and selecting corporate counsel.
Manage to lead - board development and operations v2IntelliVen
These slides present a framework for boards that make clear the difference between a Board of Directors and a Board of Advisors as well as how to set up and get the most from each.
Finders, Minders and Grinders: The Three Essential Roles in Your BusinessAvalon Ventures
In order for a company to be successful at all, it needs three types of people: Finders, Minders and Grinders. These roles need the support of each other. Here is how they are distinguished and intertwined.
5 Things to Remember In the Changing Landscape of VCAvalon Ventures
The VC landscape has changed more in the past three years than in my almost 20 years as a VC. For entrepreneurs, there’s never been a better time to start something. For early stage VCs, the investing space is becoming more competitive, which is healthy and good for the startup ecosystem. VCs who see themselves as stewards, or coaches of their founder’s creativity and talent, will retain their value. By contrast, VCs who seek to control companies, slavishly adhering to a numbers game, may very soon find themselves replaced by other sources of investing that allow them to retain more ownership of their idea. Here are five things VCs need to remember in the changing landscape.
Entrepreneurs are incredible people. They are a rare breed of resilience and passion who press on even when there’s one reason to keep on and nine to stop. Brady Bohrmann of Avalon Ventures explains how to spot a true entrepreneur
4 Lessons Learned From 20 Years As A Venture Capitalist Avalon Ventures
I’ve been in a uniquely exciting position throughout my 20+ years as an operator and VC to help develop the future of technology and the teams that make that happen. Many define Avalon’s intuition in markets and technologies as prescience, but what it actually boils down to are a few core tenants for creating disruptive, category-defining companies and achieving capital efficiency.
3 Reasons Why Your Startup Is Struggling To Raise Venture CapitalAvalon Ventures
Now it’s a great time to start a company. Not only is there more capital available, but the costs to start a company have decreased significantly. Yet many companies are still unable to raise funding early enough to get off the ground. If you are finding yourself in that position, you’re likely wondering why you’re having trouble raising funds if the market is doing so well. There are three common mistakes that early stage companies make when pitching to VCs.
There is a lot of talk about creating “category-defining companies” in the modern business world. Brady Bohrmann of Avalon Ventures defines four common characteristics in the founders of truly category-defining companies, passion sitting at the top of the list.
How to Improve Your Venture Capital Pitch In 5 WaysAvalon Ventures
If you are the founder of a tech startup, it’s likely that at some point you will need to pitch a venture capital firm to raise money. Here are a few simple tips from Brady Bohrmann of Avalon Ventures to help you prepare for and improve your pitch to venture capitalists.
3 Pieces of Advice For Founders Connecting With Top Venture CapitalistsAvalon Ventures
Getting into the heads of Venture Capitalists can be a tricky job, but essential for raising large amounts of money. From forming, financing and developing over 100 early-stage companies and investing with instincts, Kevin Kinsella of Avalon Ventures provides advice to entrepreneurs on connecting with VCs.
4 Indicators That A VC Is Right For Your StartupAvalon Ventures
Today there are more funding options for early stage startups than ever before. This increase in venture funding is mainly due to the emergence of non-traditional investors such as hedge funds and mutual funds. In this slide deck you will learn how to determine which VC is right for your startup.
How and Why Venture Capitalists Should Say No To An Investment OpportunityAvalon Ventures
No is the most frequent and likely the most important word VCs should use. There are a variety of ways to say No and a number of ways VCs can be better at it. Brady Bohrmann of Avalon Ventures explains four tips for other venture capitalists.
There is no one-size-fits-all definition of what “early stage” means and it varies among industries. Typically, it means a VC firm is either the catalyst for starting a company or the first, and often only, institutional investor. Early stage investing involves a few other key themes detailed by Brady Bohrmann of Avalon Ventures.
What You're Going to Learn
- How These 4 Leaks Force You To Work Longer And Harder in order to grow your income… improve just one of these and the impact could be life changing.
- How to SHUT DOWN the revolving door of Income Stagnation… you know, where new sales come into your magazine while at the same time existing sponsors exit.
- How to transform your magazine business by fixing the 4 “DON’Ts”...
#1 LEADS Don’t Book
#2 PROSPECTS Don’t Show
#3 PROSPECTS Don’t Buy
#4 CLIENTS Don’t Stay
- How to identify which leak to fix first so you get the biggest bang for your income.
- Get actionable strategies you can use right away to improve your bookings, sales and retention.
Explore Sarasota Collection's exquisite and long-lasting dining table sets and chairs in Sarasota. Elevate your dining experience with our high-quality collection!
Best Crypto Marketing Ideas to Lead Your Project to SuccessIntelisync
In this comprehensive slideshow presentation, we delve into the intricacies of crypto marketing, offering invaluable insights and strategies to propel your project to success in the dynamic cryptocurrency landscape. From understanding market trends to building a robust brand identity, engaging with influencers, and analyzing performance metrics, we cover all aspects essential for effective marketing in the crypto space.
Also Intelisync, our cutting-edge service designed to streamline and optimize your marketing efforts, leveraging data-driven insights and innovative strategies to drive growth and visibility for your project.
With a data-driven approach, transparent communication, and a commitment to excellence, InteliSync is your trusted partner for driving meaningful impact in the fast-paced world of Web3. Contact us today to learn more and embark on a journey to crypto marketing mastery!
Ready to elevate your Web3 project to new heights? Contact InteliSync now and unleash the full potential of your crypto venture!
Best Crypto Marketing Ideas to Lead Your Project to Success
How To Build An Effective Board of Directors
1. How to Build Your
Board
by Brady Bohrmann,
Partner at Avalon Ventures
2. 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
and Vook.
3. Expert observations and tips
on building an effective board:
• What is the purpose of the board?
• How do you compose your board?
• What you can expect from your investors?
• What makes for a great meeting?
4. 1. Understanding the
Purpose of Your Board
In its simplest form, the board of directors is a group
of elected or appointed members charged with the
responsibility of overseeing your company’s
activities.
5. The Structure of Your Board
The structure of the board is spelled out in the
company’s bylaws and typically includes:
• The number of directors
• How each director is appointed
• The minimum number of times per year the board
must meet
6. The Primary Responsibility
The primary responsibility of your board members is
to represent all shareholders—not merely their
individual interests. You will often hear this described
as a fiduciary obligation.
7. The Fiduciary Obligation
A fiduciary obligation is composed of the three legal concepts:
• Good Faith: The presumption that all directors will deal
honestly and fairly when making decisions, regardless of the
outcome.
• Loyalty: Directors must put the interests of the company
ahead of their personal interests.
• Duty of Care: Attempts to define a standard, often referred
to as the business judgment rule, whereby a director owes a
duty to exercise the judgment an ordinary person would use
under similar circumstances.
8. Investor Board Members
For venture-backed companies, investors will
typically exercise control over their investment by
requiring:
• One or more board seats
• A series of protective provisions
• Special voting rights spelled out in the investment
documents
9. an example:
The sale of a business may require your investors’
consent.
A subtle (and often misunderstood) distinction is that
it is perfectly acceptable for your investors to vote in
favor of something as board members, but block the
very same activity by exercising their voting rights or
control provisions.
10. The Foundation of Your Board
The concepts of fiduciary obligations and voting
rights may seem foreign at first (or even like overkill
for an early stage company).
If properly observed, they form the very foundation
of your relationship with the board—and through it,
with your stakeholders.
11. an example:
There will be times (e.g. when raising capital, selling
the company, or taking it public) when your
stakeholders may question if you have properly
fulfilled your obligations to them, so developing,
understanding, and acting on these basic
principles will serve you well.
12. 2. How to Compose
Your Board
Some of the first—and most
important—decisions you will
make when raising venture
capital involve negotiating the
size and composition of your
board.
13. The Ingredients
Typically, your board will consist of:
• Representatives from the holders of the
common stock (i.e., founders)
• Holders of preferred stock (i.e., investors)
• The CEO
• One or more independent directors
In the early stage, usually the founders are the
largest holders of common stock and will control
the board seats for the common shareholders and
the CEO.
14. The Size of Your Board
For early stage companies, we suggest a
small and “balanced” board consisting
of no more than five members:
• Two representing the common
shareholders (including the CEO
seat)
• Two from the preferred investors
• One independent director
recommended by the founders.
15. Defining the Investor
Director
Avoid rushing to appoint the
independent director. Instead, wait until
you can define the ideal candidate.
It’s important to take the time to find
someone passionate about your
business and willing to leverage their
network and expertise on your behalf.
16. When to Keep it Small
If the amount of capital you are raising is relatively
small, or structured as a convertible note, it is
becoming common to reduce the size of the board to
three members composed of:
• Two common representatives
• One investor
This is a practice we generally support.
17. Board Meeting Frequency
In an early stage venture-backed company, you
actually need only a few meetings each year to
meet your fiduciary and governance obligations.
18. Board Meeting Content
Most official board business is limited to operating
matters, company performance and strategy:
• Approving the annual operating plan
• Issuing employee options
• Larger events such as authorizing funding,
partnership agreements, or acquisitions
20. Management and investors alike begin to rely on the
board meeting as the preferred method of
communicating with one another.
The meeting then devolves into a parade of scripted
departmental updates and forced strategy sessions, all
crammed into a three-to-four-hour window.
The Communication
Conundrum trap:
21. A board meeting is arguably the worst venue for
productive conversation, and too much time is
spent looking in the rearview mirror while too little
time is focused on teasing out key problems and
opportunities.
The group dynamic of a board often reduces
conversations to the least common denominator,
inhibiting an efficient and productive transfer of ideas.
The Communication
Conundrum (cont.)
22. Resolving the
Communication Conundrum
At Avalon Ventures, we prefer to spend most of the
time working with management outside the board
meeting, in a series of informal, and often open-
ended, get-togethers.
23. 3. Setting Expectations for
Investor Directors
You should expect the same from an investor whether
or not he/she is a member of your board.
24. 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
of these!)
25. A Good Investor Director
A good director will make you a better CEO by
knowing:
• 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.
26. 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.
27. 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
company.
29. The Dictator
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.
30. 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
know.
31. 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
and worth.
32. The Patronizer
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.
33. The Meddler
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
opportunity.
34. The Academic
A person who lacks real-world company-building
experience and approaches the boardroom as a
living laboratory.
Though they’re often charming and articulate, it’s best
to let them experiment with someone else’s
company.
35. 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
used indiscriminately.
36. from experience:
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
the CEO:
• One CEO may benefit from a softer touch and Socratic
style of leadership
• Another may prefer a no-nonsense and right-to-the
point relationship.
37. 4. How to Run a Great Board
Meeting
There are many ways to run a great board meeting.
Choose the approach that is right for you.
38. Finding the right approach
• Talk to other CEOs: see what’s worked for them.
• Consult with your board: find out their preferences.
• Remain fluid: the frequency and structure of your
board meetings will need to evolve as the business
grows.
39. .
Here are 6 tips
to get you started on
the right track.
40. 1. Don’t let the inmates run
the prison.
• As CEO, you have the responsibility AND the authority
to run the company.
• Your directors will counsel you and sometimes strongly
disagree with you, but can’t make decisions for you.
• As the leader, you must fight for what you believe in.
• Many times we’ve offered different points of view to a
CEO and ultimately accepted and supported their
decision.
41. 2. Corporation vs. Kingdom
• It is very difficult to make the adjustment
from sole decision maker to being held
accountable by your board.
• There are many highly successful
founders who have maintained leadership
positions in their companies (e.g. Jeff
Bezos, Larry Ellison, Mark Zuckerberg).
• Remember and observe the fiduciary
obligations you have to your stakeholders
and always keep in mind the company is
bigger than any one person, including
you.
42. 3. Keep it simple
• You can’t cover everything in one meeting.
• Provide your board with a well-prepared board
package that covers all the information it needs.
• Pick one or two key topics and plan to devote most
of the meeting to discussing them.
43. 4. Keep it short
• Keep the meeting no longer than two or three
hours.
• Keep it sharp and to the point. A high-intensity
and focused exchange of ideas is far more
valuable than a low-tempo, meandering discussion.
• Clear the formal board business first, and be
prepared to take important (but not immediately
vital) discussions offline.
44. 5. Solo artist vs. frontman
• Some CEOs play it close to the vest and tightly
control the directors’ access to management.
• Others encourage direct relationships between
directors and key members of the team.
• Either approach can work.
• We prefer to get to know the team inside and
outside of board meetings; this gives us a better
feel for the company and the people managing it.
45. 6. Use your attorney
• Ask your corporate attorney to attend all board
meetings to take notes and prepare the minutes.
• Keeping accurate and up-to-date records is a
good habit and will pay dividends down the road
when you sell the company or take it public.
• Poor record keeping slow downs or jeopardizes the
sale of a company, and buyers will use it as a
way to chip away at price.
46. The Takeaway
• Understand your responsibilities
as CEO
• Know how to structure and build a
great board
• Learn how to run a productive
meeting
• This will lead to a fun and
rewarding journey