Of all the things I thought were important when I started my company, but weren’t, I’d put the board of directors meetings at the top of the list. You ask, “why do you feel this way?”
The answer is your board of directors meetings are a necessary evil.
I remember feeling very nervous before our first board of director’s meeting after we closed our funding. Dave, my advisor and coach, had suggested that I meet with each investor and board member 1:1 before each board meeting.
But I still worried and wondered what we would discuss in the board meetings. Would there be deep strategic discussions about the direction of the business? Would the board meeting last six or eight hours?
My investors were experienced investors from arguably Tier 1 firms. I think they got, and I got, much more out of our 1:1 meetings than the board meetings. The board meetings had the feel of a necessary evil, something you had to do, but the meetings were of little value.
You want to get in, get out, and get done with your board meetings.
I remember asking Gill, one of my investors, in one of our 1:1 meetings if we should have a strategic discussion in the board meeting about the direction we were taking. Gill said, “Well, we can do that if you like. But you need to have a clear idea of what you want to do.”
In other words he was saying, “Don’t expect us to solve your problems because you might not like what we come up with.”
As time went on, I realized the true value of our board meetings was giving our board a chance to interact with the executive team. That was not at all what I would have expected, but that’s what it was.
I made a huge effort to never, ever surprise the board. In other words, I always told our board about any problems or issues in our 1:1 meetings before the board meetings.
I think the transparency helped us build trust. Beyond that, I felt our board meetings were something we had to do. Get in, get out, and get done as fast as possible was my goal.
That’s why you should have as few board meetings as you can get away with.
“Having board meetings every four weeks is insanity,” I said to my co-founder, Jeroen. “I can’t even imagine it. Six weeks is hard enough. But four weeks? My god, you’d spend all your time preparing for board meetings!”
Now, I was exaggerating, but it takes at least a few days to properly prepare for a board meeting. Plus, you want to meet with your investors and board members before the meeting, as I said, so you never surprise your board.
In other words, you lose a lot of productivity if you’re constantly preparing for board meetings. So, you should see what you can negotiate with your investors.
I have one person I’m working with who successfully negotiated having board meetings every 12 weeks. That’s your goal. The fewer board meetings, the better.
You should expect your investors and board members to provide you with strategic advice.
I was fortunate to have two experienced investors, but their styles couldn’t have been more different. It was, as Regis McKenna told me (he was an advisor to Gill’s fund, and he had worked with our other investor, “Raul”) “The yin and the yang.”
Gill liked to gently guide me. Raul liked to dictate. But for the most part, they just let me run the company as I saw fit. They were almost like guardrails.
And that’s as it should be. You are the CEO. It’s your company to run.
If you create a vacuum, your board will step in and fill the vacuum.
One of the big mistakes that you’re likely to make is ceding power that is yours to your board. For example, “Ray”, a CEO I’m working with, asked me whether he should consult his board about whether to use a retained search firm to replace his VP Business Development.
“I wouldn’t,” I said. “Instead, you should tell your board that you’re going to use a retained search firm.”
“Why do it that way?” Ray asked me.
“Because it’s your decision. You’re the CEO. You’re running the company. So just make the decision.”
The reality is that if you ask your board for their opinion, they will give you their opinion. But you’re creating an unnecessary problem. Worse, you’re encouraging inexperienced board members to get involved in running your company.
It’s your company, so you are under no obligation to follow your board’s advice.
For example, I felt we needed to get a loan to extend our runway before we raised our next round of funding. I had Tina, our controller, work with Silicon Valley Bank, to arrange the financing.
I obviously needed our investors approval, so I spoke with Gill and Raul in our 1:1s. Raul agreed with my decision instantly, but I was surprised that Gill was against the idea.
“We’ve seen eye to eye about everything until now,” I said.
“I know,” Gill responded. “I think you’re better off just raising the next round. However, I’ll support you if this is what you want to do.”
The most powerful thing your investors can bring to the table is their support and alignment with you.
That’s what I loved about Gill. He understood that it was your company to run as CEO, not his. Every step of our journey together, he supported us.
Alignment. That’s what you really, really want from your investors and board members. When you have alignment, you can move mountains and build a really great company.
When you don’t have alignment, it’s like you’re fighting a world champion boxer with one hand tied behind your back. Just remember that investors are not your friends, they are investors.
As my Dad said to me, “Everyone’s money is green.” You just want to make sure the money keeps flowing.
For more about the dark side of dealing with investors, read: What Are The Warning Signs You Have A Bad Investor?