One of the many strings attached to a capital raise is a formal Board meeting with some of the investors who participated in the funding round. Many entrepreneurs complain that these meetings are too long, require too much preparation, and don’t achieve much.
We listed six ways to make Board meetings more productive, useful, and worth your time.
1. Choose Board Members Wisely
Just like any team, Boards function better when their members bring relevant expertise, respect each other, and have chemistry.
It doesn’t mean you should put on the Board people who get along well. Debates and different points of view allow founders to make more informed decisions.
One question founders often ask is: how soon should they put a Board together?
Mark Suster, an experienced VC who’s written profusely about Startup Boards, advises Founders not to form a Board too early; otherwise, they may not be able to remove inexperienced members when the time comes.
Another consideration is to adjust the Board’s composition (and size) to the startup’s development stage.
As the company goes through more rounds, control tends to change hands. At some point, Founders lose the majority vote and need to share strategic decisions with VC firm representatives and independent directors.
2. Prepare A Concise But Informative Board Pack
Board packs are documents designed to help Board members make informed decisions.
They may cover all the company’s material aspects, from product development to financial performance, key hires, strategy, and equity-impacting issues. But they are not a broad info memo; the pack’s content is tied to the Board meeting’s agenda, so most of it may change from one meeting to the next.
Good Board packs are reasonably short. They contain sufficient information and facts for Board members to be educated on critical issues and make sure the company is on the right track.
While it may be tempting to put as much information as possible, Founders should focus on what is necessary to make value-creating strategic decisions. As in other aspects of business life, less is more.
One tip we often give Founders is to keep the Board pack structured the same way so that Board members can sift through it quicker.
3. Hold Monthly Reporting Calls
One of the main obstacles to meaningful Board meetings is long back-and-forth discussions on numbers.
Founders should preempt this issue by sending Board members a monthly reporting pack with the main financial and non-financial metrics.
This so-called “Fact Sheet” should contain at least the following information:
- Topline numbers: sales by business unit and gross margins (when possible)
- Main variations on costs, such as key hires and larger-than-usual spend
- Updated cash flow statement in a cash-in/cash-out format (or at least the end-of-month cash balance)
- Commercial pipeline including the probability of success and multi-year revenue potential (when relevant)
The monthly Fact Sheet will help focus quarterly meetings on strategy because Board members will spend less time asking about numbers. They will have had a chance to discuss them at monthly reporting calls.
4. Send Out Your Pack 48 Hours In Advance
Effective Board packs take at least one week to prepare and involve many members of the leadership teams. Founders tend to leave it to the last minute to write the deck, given all there is to do.
Consequently, they send it over to Board members too late, often only hours before the meeting – and sometimes not at all, which forces everyone to have a “live” conversation.
This practice should absolutely be avoided. Unprepared Board members have less impact: they haven’t had time to think about the issues and bring value to the discussion. They also are less likely to mobilize their networks ahead of the Board meeting and challenge decisions that need to be taken at the Board.
Founders need to understand that a quarterly Board meeting needs a lot of preparation, both in making the deck and reading it. One method effective Founders use is not to wait for the last moment to draft the presentation, but sit down regularly during the quarter and write a few pages on specific strategic topics they want to address at the next meeting.
5. Make What You Want From The Board Clear
One reason Founders don’t get anything out of their Board meetings is often that they don’t ask.
Many Board packs only describe the situation and propose a single course of action. They don’t leave enough room for debates. Consequently, Board members go through the pack and fail to challenge the management team.
In a recent post, Brad Feld tells how the team presenting at one of his Board meetings had included specific slides before each section of the pack to tell Board members what was expected from them.
Good Board packs bring relevant information but no definitive answers. They open the floor for a discussion, not unlike Harvard Business School case studies.
If Founders cast their Board right, members will look at the issue at hand from all angles and help management make a decision knowing the pros and cons.
6. Take Minutes And Report On Progress
It’s paramount to take faithful minutes of the meeting, recording what was decided and what needs to be acted upon before the next Board.
These notes must be shared with Board members shortly after the meeting, so they have an opportunity to make their comments while the discussion is still fresh in their memories.
One good practice is to start the next Board meeting with a page showing what was decided at the previous meeting and how much progress was made on each issue.
Also, things don’t always go well between founders and their VC investors. Having confirmed minutes of past Board meetings will help clear up grey-area situations – or convince a judge if it comes to that.
Board meetings don’t have to waste Founders’ precious time.
They should be an opportunity for them to take a step back and assess whether the company is on the right track, assisted by a group of people who bring rich expertise and experience.
If You Want To Go Further
Our module “Startup Boards“, which is part of our e-mentoring programs, helps Founders and Junior VCs have more impact in their Board meetings.