Learning to lead the board is part of becoming a world-class CEO and founder. Hopefully my perspective as an investor is helpful to other entrepreneurs at early-stage startups who are learning to manage investors and boards for the first time. In some ways this advice also applies to Seed Stage entrepreneurs who may not have official boards, but meet with investors regularly.
At the Series A stage, you should host board meetings every six to eight weeks. Each meeting should be approximately two to three hours.
Don’t think of board meetings as a time when you and the team are meant to present your “progress report.” The board meetings are for the CEO and the executive team to step back and think about the company's strategy and its main functional areas.
The goal is to discuss these questions:
These meetings are an opportunity to get feedback from the board — who in theory should be people whose input you value and trust. If you don’t do this step-back every six to eight weeks, I guarantee you won't do it enough because the day to day will consume you. In a market that's moving fast, these check-ins are critical.
The board is always evaluating the CEO to see how they can help. You must lead your board the way you lead your team. If you aren’t leading your board, they'll wonder if you're doing the CEO job well.
The board meetings are not sales pitches to the board. This is time to candidly discuss the good, the bad, and the ugly. If you have an experienced board, you will NOT scare them with anything. You are all in the boat together and the only way they can help is if they know what is working and what isn’t. Intellectual honesty and transparency about the facts of reality greatly improve your chances of success.
The CEO should start with highlights and lowlights. In 10 minutes, give the board the update on how the company is doing in all areas. In the CEO’s own words:
Keep in mind: If the board meeting were to end after 10 minutes, the board would have the 80/20 on the situation.
Goals: For each critical functional area, there should be stated current quarter and annual goals that can be measured. At each board meeting, review the goals and recap how you are doing against those goals. What’s working and what isn’t?
The key areas to cover are similar to every Seed Stage or Series A funded startup:
Show your current org chart and desired org chart. What are the open positions you want to fill immediately? Show your pipeline of candidates. What are the other key hires you need to make in the next three to six months? How is morale? Any attrition (wanted and unwanted)?
Detail the current customer conversations in progress. What stage are they in? Establish a qualification label everyone can understand for each stage of the sales process.
Note for each account in progress:
• What is required to close?
• What is the use case?
Identify that use case which BEST fits your current product offering and be sure you are addressing a “hair on fire” situation.
Produce a clear, visual timeline that everyone can understand. Include dates that are tied to specific releases and the functionality you expect with each. Constantly ask yourself, Does my engineering/product roadmap align with the “What is required to close” for top accounts? Are you prioritizing what your desperate users need?
Review with the board the marketing “plan” for the company. Any updates on outbound activities? How about the demand generation plan and targets (top-of-sales-funnel pipeline, which includes any content strategy, PR, conferences, cold calling).
What are your goals in terms of awareness? Quantify them so you at least have something to measure against. Website visits? Articles published? Qualified leads? Distinguish between who is just interested in getting educated about what you do and who has a timeline, project, budget, and authority to buy your product. Marketing is revenue creation. Sales is revenue conversion. So how is your revenue creation engine working?
Walk through your 12-month operating plan, including monthly and quarterly targets. The board will review with you how you are doing against the plan. It is less important that the targets are precisely correct. It’s more important that you have measurable goals and can talk together with your board about whether they are right or wrong and how you should adjust.
Typically it's too much to cover all five areas in detail. Instead, the better approach is to give at least an overview for each of the main functional areas of the business (one to two slides for each area).
Keep the format generally the same from board meeting to board meeting so everyone can easily track progress. It's normal for the CEO to want to do a deep dive into one key area and discuss and get feedback on the plan and the metrics. These are NOT brainstorming sessions. These are meant to be the CEO leading the thinking on the plan and talking through the metrics. And then getting feedback on the go-forward plan to improve. Do you need additional headcount? Is the current leader of this function not up to the task? Why isn’t the team hitting its targets? etc.
Over time, the board will expect VPs who are responsible for each area to present their sections of the board deck.
Early-stage founders might not have all of those executives, but that’s a great reason to spend time on the org chart and talk through the plan and timing of such hires. As you hire great VPs, you will have more time as the CEO to work on the strategic decisions for the business — which only you can do. There should be an open session where all directors, observers, and executives can participate and a closed session where the board reviews sensitive matters like compensation.
Get more “A players” on the engineering team and start to build a go-to-market team and engine with an early sales rep. Once you are clear about our desperate user and use case, you can start adding marketing resources.
Understand your highest-priority use case — the situation where you can land and delight early customers. Then make sure your engineering road map and timeline are prioritized based on this.
Clarity on which conversations are just conversations and those that are likely sales in the next 90 or 180 days. Life and death difference between “we are excited about what you guys are doing and want to learn more” and “we have to have that ASAP.” If there is one thing startups get wrong, it is having “happy ears” and thinking customers really want to buy, but not qualifying what it will take to actually close a deal.
You need early evangelists. The accounts that use your product and want to tell everyone how happy they are about the choice. Aim for five to 10 of these in the next 12 months. It will take iterations with them on product to make sure they are thoroughly delighted with our solution. You simply can’t add aggressively to sales expense (headcount) until you have those five to 10 delighted customers. The worst thing a founder can do is add to sales expense too fast before the product is showing signs from customers that they’ve nailed it.
Lastly, remember that there is no one right style or way to run a board meeting. No one is perfect at it starting out. Running a board meeting really is an art and a muscle you build up over time. But it is part of being a great CEO and critical to learn. Communicating with your board and capturing the key performance indicators for the business in a way that explains what is happening is essential to success.
Leading through uncertainty