Home > Roles of the Board > Does your start-up need a board?

Does your start-up need a board?

So you are the founder, you had the idea, you probably are the best to know where your  company needs to go…why should you involve anybody else in managing your company?

Particularly at a time when big and successful companies like Facebook and others have kept voting rights in excess of their economic stake after an IPO, isn`t it justified to avoid granting control to strange people?

Johanne Bouchard recently depicted how boards are at Unicorns, (1) these powerful but still at an early stage in their life companies. According to her, they use to be smaller, usually made of (relevant) investors and founders and other executives, (equity ownership at the board usually high), so that its leadership style adopts the shape below; these boards spend their time in value creation and growth related issues, which is perhaps their most relevant difference with mature or consolidated companies,  where (broadly speaking) compliance topics may reign. So, why should a founder have a board at all, particularly when the company hasn`t received large amounts of VC or early funds yet, when only you, your family and friends have contributed to launch the project?

Leadership Style Unicorn

Katie Benner (2) refers to Benchmark`s Bill Gurley role in Uber and other startups, (and many of them have been succesful…). He uses to curve the usual arrogant attitude by startup stars, imposing some discipline. His experience when confronting tough competitors and/or foreign markets helps deploy resources and funds efficiently; excessive risk-taking can also be lowered if a trusted director has the capacity to make a difference between dreams and purposes deserving funds.

She describes Mr. Gurley not as a pessimistic but simply as somebody who is (or may be…nobody is infallible) ahead. Shouldn`t a good project have somebody like him on board?

Something critical to the success of a project is the funding pacing, the different  milestones a  startup must reach at the relevant time so as to assure the next funds round. Discipline is critical both in defining the milestones, the funding steps and imposing controls so that the company succeeds. It is a bad wakeup when a dream vanishes because funds were not effectively not correctly allocated in time or means.

An experience board can help assuring the right allocation is made. This should  be easy to understand for a founder that has already gathered some funds even if only from family and friends.

Finally I will just refer to one of the many global views to be found in the web about the use of a board by startups, here (3). Mentorship, extraordinary events like M&A projects, rasing funds etc., …, are the benefits of having a good board by your side.

 

  1. https://www.johannebouchard.com/2016/02/29/board-governance-taming-the-unicorn/
  2. https://www.nytimes.com/2017/03/18/technology/bill-gurley-uber-travis-kalanick-silicon-valley.html?partner=rss&emc=rss
  3. http://seedcamp.com/governance-for-startups-how-to-build-and-manage-a-board/
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