By Kathryn Keefer
There are several things to consider when creating a Board, be it advisory or statutory, so that it meets your startup’s needs and goals. There are three key factors to remember when considering how to build a Board: clarify the roles, diversify who is on the team, and stay objective to the startup’s best interests.
Finding the right people for a Board is crucial in forming a successful foundation for a startup. To find the best fit for each role, it is important to first clarify which board positions need filled and who the leader is. Once these roles are established it narrows the search to those that qualify for a specific position, rather than trying to fill undefined roles.
Consider the size of your startup when deciding how many people you need on the Board. When first starting out, a Board can be as little as one or two people. A smaller Board means more collaboration and interaction, which is beneficial when a business is still finding its place in an industry.
As the startup grows, so should the Board. It is hard to say exactly how many people your startup should have during each phase, but here is an example of a growing startup Board with each round of funding:
Seed Stage: 3 Board Members (Founders and Seed Investor)
Series A Funding: 4-5 Board Members (Founders, Seed Investor, Series A Venture Capitalist Investor, and maybe one independent individual)
Series B Funding: 5 Board Members (2 Founders, 1 Series A VC Investor, 1 Series B VC Investor, and one independent individual)
Series C Funding: 5-7 Board Members (Including those above, Series C Investor and maybe one more independent individual)
Once a startup has gone through several rounds of funding and feels established in a certain industry, the Board should include several key players:
CEO (Founder or Co-Founder)
Chairperson (Moderator of board meetings and facilitator of productive discussion)
Other Board Members - Include executives (CEO, CFO, COO, CLO, etc.), non-executives who are not directly employed by the company and oversee the executives, and independent individuals who are not directly connected to the company.
Amongst these board members, it can be useful to include a variety of experts on your team. Having a financial expert, a marketing expert, an exits specialist, or an expert in sales (depending on your startup’s needs) can help a startup avoid bad business decisions and grow based on knowledge and experience. The right experts depend on a startup’s nature, mission, and goals.
One of the most important pieces of building a great board is diversity. A wide range of experience, backgrounds, expertise and perspectives helps a business solve problems more efficiently and creatively. A group of unique and passionate individuals stemming from all walks of life can create a valuable Board for any startup.