Discussion

“The first Board meeting after you invest is when you realize exactly what you got yourself into” is a line that gets thrown around in the venture community. There are many myths behind the role of the Board, especially as a less experienced venture capitalist. This section will discuss different approaches to being the best Board member a venture investor can be.

“ I wouldn’t know how to manage a team, run a business, lead a company. But I know how to manage the people who do know how to do that.”^[1]

Tips and Tricks

• Have a maximum number of board seats per partner. (Emergence)

• As a board member, it is important to understand that the majority of the underlying success of most companies is more attributable to the founders and management team rather than the VC. (Walking Ventures)

• Align your board involvement style and messaging to your brand identity. (Cervin Ventures).

• Go into board meetings assuming you get a limited number of questions/interventions, say 5. Then thoughtfully use each “slot”, prioritizing what matters most for the company. This mindset forces you to listen more than talk, and being selective about what you say and why. (Las Olas VC)

• Bring attention to the stuff that’s hard to talk about, but really matters. That’s your chief job as a board member. (Las Olas VC)

• Engage the quiet people. Very often they say the most valuable things. (Las Olas VC)

• The work of board involvements should be lumpy and come in bursts. When a burst happens, go all in. Companies have key moments of either trouble or opportunity, going above and beyond will really earn your reputation. (Golden Gate Ventures).

• Value is created at certain inflection points, or “forks in the road.” At these points, the board member may be able to provide insight and experience to help them make smarter decisions. (Walking Ventures, KEF Holdings)

• Hold back on imposing your own brilliant ideas as a board member, instead create an open space for management to discuss their concerns and company risks. Then, help them think through finding their own solutions. (TRPE Venture Partners)

• When you’re helping recruit a key executive, get really involved as far as even doing interviews. (Golden Gate Ventures)

• Do exit interviews when key executives leave the companies. (Golden Gate Ventures)

• If you feel you need to do a CEO change, do it as soon as possible. Most investors regret waiting most of the time, and by the time you get around to it it’s too late to turn the company around. (SV Health Investors, KEF Holdings).

• Engage experts to take relevant board seats. Social Capital has 4 Board Partners. Some are LPs, some have carry in the fund in which the company is a part of. (Walk Ventures, Social Capital Partnership)

Case Studies

Highlights

Highlighting Emergence

Emergence almost always leads their investment rounds, almost always takes board seats, and plays an active role in shaping the go-to-market strategy.

Highlighting Golden Gate Ventures: Do More Than Your Competitors

Five or six years ago, being a Board Director in Southeast Asia was a very passive role. Even now, some of the more active behavior coming out of Silicon Valley is still unheard of. Golden Gate Ventures sees this as an opportunity to differentiate and earn their reputation, so they take a proactive approach to managing their board involvements. The GGV team believes when companies get into trouble or have a key opportunistic moment that the operating team can’t fully meet head on, GGV should go all in. They engage recruiting agencies directly and help interview for key hires. They do exit interviews for key executives that are leaving their portfolio companies. They keep an active list of key market entry and market expansion partners across Southeast Asia and actively facilitate partnerships. In general, the principle is to do more than other Board Directors, to stand out to their portfolio companies, and to earn and keep their reputation as the “golden” standard of VCs to work with in Southeast Asia.

Highlight Walking Ventures on Impermanent Board Seats

Tim Jackson of Walking Ventures observes that partners who serve on a large number of Board of Directors can be at risk of failing to make a meaningful contribution to all of the different companies due to bandwidth constraints. He also believes that individuals can only add value at the board level relative to the stage of company building, so Walking Ventures believes you should only take a board seat when the company is at a stage when you can add the most value. Tim explains that in order to provide value to the companies that he holds a Board position with, he sets the expectation that he will only occupy the seat for one year. As the company grows, the spot can be given up to later stage investors who may have more appropriate expertise.