In this episode, Christopher Mirabile, Executive Chair of Launchpad Venture Group, explores the pivotal role of boards in startup companies and discusses how boards can be both a critical support system as well as a driver of success. We love our listeners! Drop us a line or give us guest suggestions here. Big Ideas/Thoughts/Quotes “Life is too short to suffer with the wrong people in your boardroom.” Startup Boards are different, but still vitally important “Boards have featured prominently in my entire professional life.” “When I was a consultant with the strategy group at Pricewaterhouse, ultimately our work was commissioned by boards and delivered to boards, and those board presentations when I was lucky enough to be in the room as a young person on the team were some of the most high-pressure situations that I ever was in professionally and left a real impression on me.” “When I got into the startup world, I sort of had to unlearn a certain amount of what I’d learned about boards and moved to the end of the spectrum where boards provide as much mentoring and business value as they do governance.” “Startup boards tend to be a little smaller, a little bit more nimble and often the membrane between shareholders and directors is much thinner because you often see meaningful representation direct from the shareholder base on the board.” “When you run into resistance from a founder [about a board], it's often really more of an educational journey than a negotiating journey to try to get them to understand the value of a board.” Why is a board important for a startup? Your investors want it and you're not going to be able to raise money without it and why would you reinvent the wheel when you can have people who made those mistakes before and can help you avoid wasted time and wasted resources. “A big part of what [we] do is help CEOs understand that …if you go into a relationship with your board, it's sort of like an intellectual partnership where you bring the courage to admit you don't have all the answers and you really seek to draw the wisdom out…” …If you show me a CEO that's failing, I'll show you a board that's failing to support that CEO properly … Attitude of Startup board members “I don't want to be anywhere near the blast radius of a startup that fails, so I want to make sure that this company is going to succeed…” Feedback to CEO after a Board Executive Session A great way to give feedback after an executive session is: "Hey, let's just do a little case study here. In the meeting, you said this, here's what they heard..." and then it's not an in-your-face criticism, it's just helping them understand how they're being perceived and how their choice of words and their manner of speaking and their style affects the impact of their communications…I think that can be a very effective non-confrontational way to give quick feedback to a CEO. The Independent Member of a Startup Board “What we're looking for is two things. One is the avoidance of some negatives and the other is certain positives. I'll start with the avoidance of the negatives. We don't want an inexperienced blowhard who has a lot of ego involved in telling people what to do and insisting that their advice be followed, and someone who contributes to a board meeting in a manner which sucks all the oxygen out of the room and makes it super awkward to disagree with them. We're looking for someone who has a little bit of experience, understands boards are a working thing and that startups are an imperfect science and they're not going to be a disruptive or difficult board member. That's the kind of the key negatives that we're looking to avoid. In terms of the positives, really, we want someone who understands the industry dynamics, understands the players, knows who the company and the CEO should be talking to, and has that bigger perspective, who can put the day-to-day operational challenges of the company into a broader industry context, and then ultimately make introductions when it's time to find additional investors or exit the company. So, all we need is a well-behaved genius. It's easy.” Training Board Members “Launchpad now has at least 50 portfolio companies and 40 Launchpad members are either in the boardroom as a director or an observer. That's a pretty large portfolio of board members and observers that the group is adding as human value to the companies.” Our training consists of three things. · One is expectation setting and accountability, · The second is we tend to give the newer investors in our group an opportunity to serve as an observer under an experienced board member for at least a year so they get a little bit of a sense of what it’s about. · The third piece is really traditional training and that consists of training we do before they serve on the board and then ongoing training after they've begun. The training ...
