You’re evaluating the performance of a startup’s board of directors. What are the key metrics to consider?

"Contrarian, but right" approach (thanks to Peter Thiel) is a must for at least one of the Board members. In one of the startups that I know closely, the Board, which was composed of the founders and lead investors only, just acted as an "Approval Committee". They have just built a protective layer over the executives and founders and avoided all critics or suggestions until the company hit an iceberg, even a visible one. Financial catastrophe wasted investors' entire money, including theirs. I emphasize more on mental independence rather than legal independence. It counts for more in the venture capital scene.

The board needs to act as a sparring partner to the CEO and top management. In order to challenge the CEOs, the board members amongst them certainly should possess the relevant expertises of startups, such as sales acumen, financial literacy, recruiting and fundraising skills. However, at least as important is that they are good psychologists - in the sense that can diagnose blind spots in management and uncover potential train wrecks before they happen. Board members with their own startup experiences are more likely to be able to uncover those blind spots.

For me the sign of a strong board is A diverse, balanced, inclusive and hase the required expertise skills and resources Then, a clear effective and agile decision making process Also, effective communication process. And, having clear goals that are based on tbe mention and vision statement of the start up working towards.

You’ll want to spell out exactly what kind of engagement you want from each director and the board in total before bringing in any new director. Stating the regular meeting cadence and requirement to be prepared by having read the pre-reads, kept pace with company news, etc. should be clearly spelled out. Committee meetings and participation requirements should also be clarified. In addition to the regular meetings and committee requirements, any other types of engagements you want your directors to do should be made clear. For example, do you expect the board director to meet with the CEO one to one at least once a quarter or monthly. Do you want board directors to make introductions and which kinds do you want.

Effective boards exhibit diversity in thought and expertise—key for innovation and overcoming blind spots. Assessing this involves looking at members' backgrounds in various sectors, functional roles, and entrepreneurial ventures. For instance, a mix of tech visionaries, financial experts, and industry veterans can guide a startup through scaling challenges, market entry strategies, and R&D hurdles. A board's ability to dynamically adjust its composition in response to the startup's evolving needs is equally crucial, ensuring it remains a strategic rather than a static entity.

the board should not be just appointed to check prior month reports. this is of course one key aspect but sometimes the board will just focus on the past which is not of great value. This is why data should be sent early enough and board members should be reviewing it before the board. this is the best way to be efficient and focus on strategy

🔍 Assessing board engagement is vital for a startup's success. Here’s what to focus on: 1. Meeting Frequency & Structure: Look for boards that meet regularly, ideally quarterly, with well-structured agendas addressing key issues. 2. Active Participation: High levels of discussion, feedback, and participation from all directors are crucial. Meetings should maintain a constructive and respectful tone. 3. Management Relationship: A strong board-management relationship is essential. The board should provide effective guidance, support, and challenge to the management team. Engaged boards drive better decisions and foster strategic growth, ensuring the startup's long-term success. 🌟

High-impact boards drive success by implementing rigorous governance, enforcing KPIs, and utilizing their networks for growth opportunities. They ensure compliance, facilitate key introductions, and provide strategic mentorship, exemplified by connecting startups with industry leaders or securing investor meetings—actions that directly contribute to scaling and market positioning.

The number one job of the board of directors, is to help grow the company. Period. Sure, #ESG should be in place. Seriously! But it won't matter much if the company doesn't grow. Board members are there to open other sources of growth - M&A, joint ventures, funding for growth etc., as well as access to their personal networks.

🔍 Evaluating the contribution of a board is crucial for a startup's success. Key aspects include: 1. Vision & Strategy: A board should have a clear vision and strategy, monitoring progress and performance against milestones and metrics. 2. Governance & Risk Management: A strong governance framework and risk management are essential for ensuring compliance and integrity. 3. Proactive & Innovative Mindset: Boards should leverage their networks and resources, helping the startup grow and scale with a forward-thinking approach. Boards that deliver value and strategic outcomes are instrumental in driving a startup's growth and long-term success. 🌟

votre conseil d administration ne doit pas simplement lire les résultats des mois passés et s en étonner / réjouir. Il est la pour accompagner l entreprise dans la définition et la mise en place de sa stratégie. Si il ne joue qu un rôle de censeur, alors ce n est pas le board qu il vous faut!!

Avaliar o desempenho do conselho de uma startup exige também considerar a adaptabilidade e as habilidades de gestão de crises do conselho. Em um cenário empresarial em constante mudança, a capacidade do conselho de ajustar estratégias, responder a desafios inesperados e sustentar o crescimento da startup em condições adversas é crítica. Isso inclui sua capacidade de avaliar riscos com precisão, tomar decisões informadas rapidamente e manter resiliência diante de contratempos. Um conselho eficaz não deve apenas guiar a startup em águas calmas, mas também conduzi-la habilmente através de tempestades, demonstrando previsão, flexibilidade e um forte discernimento em gestão de crises.

Evaluating a startup's board performance also necessitates considering the adaptability and crisis management skills of the board. In an ever-changing business landscape, a board's ability to pivot strategy, respond to unexpected challenges, and sustain the startup's growth under adverse conditions is critical. This includes their capability to assess risks accurately, make informed decisions swiftly, and maintain resilience in the face of setbacks. An effective board should not only guide the startup through smooth waters but also steer it adeptly through storms, demonstrating foresight, flexibility, and a strong crisis management acumen.

Look at the LinkedIn profiles of the directors. Ask whether they have relevant experience. Compare their experiences to the needs of the company. Ask what stage the company is at. Whether its a growth stage or an early stage matters.

Boards that excel conduct periodic, detailed self-assessments and seek external feedback, pinpointing and addressing deficiencies. For example, recognizing a shortfall in digital innovation expertise might lead to recruiting a tech-savvy director, directly strengthening the board's capabilities and strategic guidance.

A board that contributes positively to the success of the start up is extremely important; they need to provide effective oversight, leadership, guidance and direction towards the attainment of the vision, to grow the startup and enable it transition to become a corporation, a journey that is extremely difficult.

Effective boards have clear succession plans and selectively appoint new directors based on future needs, coupled with focused development programs for all members. For example, integrating a digital transformation expert into the board in anticipation of technological shifts, ensuring seamless strategic alignment and board readiness.

🔍 Evaluating board succession is key to ensuring continuity and renewal of talent. Consider these factors: 1. Succession Planning: A clear, transparent plan for the chairperson, lead independent director, and key directors is essential for smooth transitions. 2. Selection Process: Boards should have a rigorous, objective process for selecting new directors, aligned with the startup's current and future needs and goals. 3. Orientation & Development: Ongoing programs for existing and new directors ensure alignment and readiness, fostering effective governance and strategic direction. Effective succession planning strengthens a startup's leadership, ensuring sustained success and growth. 🌟

How does the board act towards each other? How do they communicate with other VC professionals in the firm? What is their investor relations plan/strategy with LPs (i.e. you and others who invest)? What are their top contributions to the overall goal? Who is the Chair of the Board and why and how? Ask as many questions as you can. The board can make or break a fund so it's important to get those answers answered.

While board composition and culture are important, the reality is that boards are composed of different people, who may have very different characters. Even with the best intensions, the theory and the practice often diverge. So, it's important to watch that all board members have enough room to express their point of view. Even if they are introverts.

The one most important thing for a board of a startup, is to ensure that people realize they actually are working in a startup. This means that you are working in an experimental environment, where in the end you try to find a repetitive and scaleable business model. Thus, no matter the position and expertise you have, you should always be open to the experiment and make sure that you do not run too many in multiple market segments. This requires the board and team to keep a focus and stick to a plan. The plan resembles that of a scientific lab: and it starts with hypotheses for a problem you assume might look for a solution (based on vision or expertise). Now the board should align all expertise/tools to achieve the set goal(s)!