How to Build a Well-Balanced Board
The critical skill sets founders need on their startup board.
The board of directors plays a critical role in the success of a venture-backed company. At the most basic level, particularly with an entrepreneurial board focused on rapid growth, the role of a board is to support and guide the company towards success.
For our latest masterclass, we joined together with Blackbird Ventures and Cicada Innovations to talk about the best practices and principles for a startup board. We discussed what to expect from your board members, the progression of a board and much more.
One important topic we covered was how to think about building a well-balanced board. As a CEO, how do you determine which skill sets are most important to have at the board level and how do you go about bringing together the range of expertise you need?
Charles Beeler is a founder and managing director at Rally Ventures, with 20+ years of experience in tech VC. He explained how early-stage, venture-backed boards are unique in that, as a CEO, you don’t get to pick the majority of your board. There are a finite number of seats, and most typically go to investors and other founders.
For the board members you do get to pick, it’s important to really think about the long-term skills that you need at the board level. You can bring potential board members in as consultants or advisors first, which is a great way to get to know them before bringing them on as board members. Take the time to make sure what you see on the surface is what you get in-depth.
Be very open about what you’re looking for in an independent seat and share this with your venture capital investors, so they can reach into their networks and help you find people who fit your criteria.
Sally-Ann Williams is the CEO of Cicada Innovations, a pioneering deep tech incubator. She talked about how what you need from your board evolves over time. At Cicada, she works with companies who have long life cycles to bring products to market. Sally advised that, with the seats you do get to pick, be really cautious and choose the skill sets you’ll need for the next 5 to 10 years. Building your company is a long journey. Look beyond what you need right now.
It’s a powerful moment when you have the ability to choose who will join your board. It’s important to take stock of who is currently on your board and what skills they have. Be honest about the skills gap, especially your own, and go hard after the skills you don’t have.
Take the time to map out what you’ll need, and get the person who will challenge you and your thinking. It will make you a better executive and leader. And it will make your company a lot stronger, too.
Robyn Denholm, Operating Partner at Blackbird Ventures and the Tesla Inc board chair, advised that, as a CEO, you want a strong diversity of thought on your board as well as diverse representation. If you have people around the table that all think the same, that come from the same discipline, or the same backgrounds, you’re unlikely to have a stimulating discussion. As the CEO, you want this diversity on the board to probe into your strategy and stress test your ideas.
The board is an asset you can leverage for their network and experience, but it’s also a group of people to lean on and get help with the many challenges you’ll have in an early-stage venture. You can augment the skill set of your management team with the skills of your board members as mentors, advisors and coaches.
Robyn suggests finding a person on your board — who is very often the independent seat — with whom you’re comfortable having any conversation. Someone who you can stress test ideas against, who will help you think of things in a bigger way and who will be very open with you.
Michael Jennings is a venture partner at Rally Ventures, and a multi-time CEO and board member. He suggests thinking of the board as an extension of your executive team.
When we’re funding early-stage companies, it’s often led by a first-time CEO. For them to have a mentor on the board is so helpful. And if you don’t have a mentor on your board, you can look to an advisor to fill that role. You want someone who has been there, done that and will help guide you from a product, personnel and growth perspective.
When Michael looks back at his last role as a CEO, which was the first time he was a CEO at a larger company, he knew he wanted his independent board member to be someone who had been a CEO and really understood the industry. The person he brought on had the relevant experience, was someone he could stress test ideas against and someone who provided great advice. As a first time CEO, it was incredibly helpful for Michael to have a mentor on the board who had been in his shoes.
The content for this article was created from a recent masterclass on building a great startup board. Rally Ventures occasionally hosts masterclasses for our portfolio companies, led by experts and industry veterans. We were thrilled to co-host this masterclass with Blackbird Ventures and Cicada Innovations.