A VC - Latest Comments in Thoughts On Choosing Board Members

Re: Thoughts On Choosing Board Members

Chris J Snook — Thu, 03 Apr 2008 00:49:45 -0000

How do you best make your skills and talents available to companies who are seeking active board members? I am interested in finding some solid opportunities to sit on the board of exciting companies in the education, alternative wellness, or healthcare industries. Thanks

Re: Thoughts On Choosing Board Members

fredwilson — Fri, 28 Mar 2008 14:36:03 -0000

Equity will be more interesting to the best candidates

I think other founders and ceos (particularly ones who've done it a number of times) are the best board members

Fred

Re: Thoughts On Choosing Board Members

Raouf — Fri, 28 Mar 2008 01:04:59 -0000

Fred,
Could you expand a little on how and where to find board members? Is salary or equity more attractive to board member?

Thanks

Re: Thoughts On Choosing Board Members

jlipton — Tue, 25 Mar 2008 13:54:39 -0000

We are a small, music industry LLC - more than a decade old, seeking to build an advisory board to assist in our transition from print to new media and to help take the company to the next level.

Concerned about potential conflict of interests when assembling a board - also since it's an advisory board only - how much of our financials are we required to share?

Re: Thoughts On Choosing Board Members

Kirk Badii — Fri, 07 Mar 2008 18:18:42 -0000

Do you have any suggestions on how I can become a board member of a company?

Re: Thoughts On Choosing Board Members

fredwilson — Sun, 02 Mar 2008 16:56:01 -0000

When you take outside investors, when you hire a bunch of employees, when
you have a bunch of customers, stuff like that

Re: Thoughts On Choosing Board Members

Scott Sanders — Sun, 02 Mar 2008 16:50:16 -0000

Thanks for the quick reply, Fred. What threshold would cause us to need a board? (Perhaps that would be a good follow up post!)

Re: Thoughts On Choosing Board Members

fredwilson — Sun, 02 Mar 2008 16:28:03 -0000

At this stage you don't need a board

Re: Thoughts On Choosing Board Members

Scott Sanders — Sun, 02 Mar 2008 16:19:54 -0000

A question when dealing with very small, private companies: I have a stake in a (very) small enterprise, with very little work necessary, and there's only two owners, including me. We don't have a board. Would it be in our interest to set one up? Or would it be a hassle that would be annoying and unproductive, i.e., my partner's opinion!

Re: Thoughts On Choosing Board Members

panokroko — Thu, 28 Feb 2008 05:16:55 -0000

The corollary to all of the Boards is Ox-Sarbanis legislation making boards responsible. It's not a bad thing to have concsious boards. Unless you have board members willing to risk all for gutsy decisions You will founder in a storm. You need lions on the board, not sheep or fearful scardy cats. The more famous, usually, the more fearfull the board members are; of taking the difficult decisions. When You are in a fight for survival as most companies are more times than you think, who do you want fighting next to You? Choose guts over glory everyday of the week. They will stand by You when you are in a corner.
RESPONSIBILITY EARNS AUTHORITY; NOT VICE VERSA

Re: Thoughts On Choosing Board Members

Chris Schilling — Tue, 26 Feb 2008 23:25:52 -0000

Fred,

Thanks for taking the time to articulate this. With the pressure to get a company moving in the right direction it is easy to assume that it is enough to have "stars" supporting the cause. The key seems to be that all members of the board support the success of the venture. This takes time, energy, creativity, and strong effective council. (Which we all need) Very cool stuff! I am a big fan of yours.

Re: Thoughts On Choosing Board Members

Aruni S. Gunasegaram — Tue, 26 Feb 2008 18:07:46 -0000

Great points. Based on my learning all of the above is so true. Bad boards can kill a company. Stumbled it.

Re: Thoughts On Choosing Board Members

jmccabegorman — Tue, 26 Feb 2008 10:39:04 -0000

Got another one:

* Interview BOD members just as thoroughly as you would potential employees.

Why are they interested in serving? What value do they feel they bring to the group, the mission, ops, strategy, etc?

Board members are doing the organization a service, not a favor. They should be able to articulate this before they sign on.

Re: Thoughts On Choosing Board Members

fredwilson — Mon, 25 Feb 2008 20:14:02 -0000

cool

Re: Thoughts On Choosing Board Members

chush.net — Mon, 25 Feb 2008 19:37:01 -0000

Looks like Yahoo could have been better of if they read this post few years ago.

Re: Thoughts On Choosing Board Members

Howard — Mon, 25 Feb 2008 19:07:00 -0000

Great post. I'm giving a atalk at TED U Wednesday on Boards and will quote liberally from this (with credit where it's due).

Re: Thoughts On Choosing Board Members

fredwilson — Mon, 25 Feb 2008 18:24:02 -0000

One of the best board members I've ever worked with was a very experienced lawyer. His firm represented the company but he didn't manage the account. He was compensated by getting an opportunity to invest in the venture round with the rest of us and he acted very independantly of his firm in his role as a board member

So I would say that having a lawyer on your board can work but not the one who is directly representing your company every day

Fred

Re: Thoughts On Choosing Board Members

Anil Rathi — Mon, 25 Feb 2008 16:02:24 -0000

Is it a conflict of interest to have your legal counsel on your board? if your legal counsel is business savvy, understands strategic issues and has shown a consistent commitment to company over many years?

Re: Thoughts On Choosing Board Members

fredwilson — Mon, 25 Feb 2008 15:50:22 -0000

That's funny

Re: Thoughts On Choosing Board Members

fredwilson — Mon, 25 Feb 2008 15:49:33 -0000

Dissent and getting along are not mutually exclusive concepts

Trust me on that

Fred

Re: Thoughts On Choosing Board Members

fredwilson — Mon, 25 Feb 2008 15:47:33 -0000

It's great if you can get them to purchase some stock. Granting options and
restricted stock is important but not as good as having real skin in the
game.

fred

Re: Thoughts On Choosing Board Members

fredwilson — Mon, 25 Feb 2008 15:45:58 -0000

I hope you didn't read my fourth point as suggesting that you create a board
you have to fight with on all the big issues. That would be a terrible
thing. I agree that ³less engaged² often means problems.

fred

Re: Thoughts On Choosing Board Members

fredwilson — Mon, 25 Feb 2008 15:45:19 -0000

Good point Jonathan. I didn't mean family or personal relationship
conflicts. I was speaking more to business conflicts.

Re: Thoughts On Choosing Board Members

Prashant — Mon, 25 Feb 2008 14:48:30 -0000

Fred excellent post on choosing board members. most important of them is not having BIG names. I would like to add up few more points which I think are important in this context

* Board members are not hired to make the team LOOK good but to make the team function in good way. Many small startups fall in trap of hiring brand name guys to just attract VC / investors / employees / whatever. Though this will help you at some places, it is not that worth as it won't be much beneficial in the long run which you should care about
* You don't need to fill up all board members at the earliest. You can start with only three board members when you are small (just keep board members authorized for 5 but fill 3) and as you grow, you will understand who else you want on your board. This will make sure that you have the place for the best board members at a later stage.

Re: Thoughts On Choosing Board Members

mike lewis — Mon, 25 Feb 2008 12:41:54 -0000

great post. Good thoughts