One of the best investments a startup can make early on is the selection of a board. Some people incorrectly assume that a board is only created at the point when you get investors, but every business of any size can benefit of having a group of people who provide advice and help the company succeed.
Recently, I participated in a ScaleUp Academy session organized by CEO World with Christoph Ortlepp from Earlybird Venture Capital. In this intimate real-time face-to-face, Ortlepp stressed the importance of having a board to help you grow as a CEO.
Entrepreneurs are characterized by their determination and laser-like focus, but that can be a huge disadvantage when you have to deal with everything on your own. Having a board of experts and stakeholders to help you keep track of all the important details of your business is key to succeed.
In this article you will find Ortlepp's best practices to create and maintain the board that will lead your business to prosperity.
Build your board as soon as possible
It's never too early to form a group of advisors, even if you consider your business is not ready to take the step. The importance of having a board grows exponentially if you're the only founder, you are going to need all the advice and help you can get.
Don't get lost in the little features
The board is a place for representative and administrative duties as well as strategic discussion. Don't waste your time on small issues and focus the attention on topics like business models, growth and budget.
Stay in control of the meetings
The CEO needs to stay in control and lead the board meeting at all times: schedule ahead of time and circulate the agenda a week ahead to allow everybody to prepare. It's very important to do prep-calls so you are aware of every single topic that is going to come up.
High frequency of communications
Four to six meetings a year are recommended, but it's important to maintain a close communication more regularly than that. A series of follow-up emails, calls, breakfasts or dinners every month or in a bimonthly basis should be enough to stay on the pulse of everything that is going on.
Diversify your board
Your board should be as diverse as possible, specially when your business starts to grow and they take over more responsibilities. Ideally, a board should have at least an experienced founder, an industry expert, an investor, a manager, and an independent board member. More investors might come in as you get more funding and they might ask the previous investors to take a step back, so you should be prepared for that.
Keep it simple
Don't include too many stakeholders in your board or it might get out of hand. For a company in seed stage there should be a maximum of three people, if it's an A-series company the number goes up to five, and for bigger enterprises there should be from eight to 10 board members.
Make the meetings count
The way you lead the board meetings is as important as its composition and diversity, and Ortlepp shared the four main aspects to keep in mind when organizing and conducting these meetings:
Ortlepp came up with these best practices thanks to his personal experience and research. He graduated from WHU (Otto Beisheim School of Management), worked in telecommunications with Oliver Wyman and helped to launch SumUp. He's currently an associate at Earlybird Venture Capital, an international venture capital firm that has backed more than 100 companies with global ambitions.
I had the chance to meet Ortlepp thanks to CEO World and their Scale Up Academy meetings, like I mentioned before. These sessions are intimate, 100% live digital conferences where a small group of participants can discuss important issues and get to ask questions to the most distinguished guests from all over the world.
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