The vast majority of venture backed startups have a board of directors.
Over time, the board may have 5 people or 7 people. Unfortunately, I’ve seen startups with even larger boards (the latter is usually for all the wrong reasons but I won’t get into that issue in this post).
These boards will include independent directors (1 or more depending on the size of the board). The essential role is provide an independent voice/vote and on all board matters.
Of course you also want the independent director to be as helpful as possible with strategy, industry knowledge, and/or operations.
I’ve seen some startups choose an independent board member based on their perceived halo effect. They want a rock star that will demonstrate to the industry that this company is for real.
Sometimes that works but only if the rock star director actually helps with introductions, domain expertise, hiring, strategy, etc. Rock star directors that “phone it in” or miss board meetings don’t help and everyone typically feels let down when that happens.
The best independent board members that I’ve seen are also CEO coaches. They can provide amazing feedback in ways that many investor directors can’t. Unfortunately, some CEOs dont’ feel comfortable sharing in an open & honest way with their investors like they do with their CEO coach. And some VCs don’t have CEO coaching abilities.
Jerry Colonna’s wrote a post yesterday that I’ve been thinking about since I read it. Jerry provides coaching & mentorship to his CEOs and other clients. He gets it and it’s clear he’s quite good at it. You can see it come though in his post. Here’s a teaser just to get you to read the whole thing:
His anxiety was high. So high, in fact, that—at first—he wasn’t even aware of it. But I could hear it in his voice, feel it in my chest, as he spoke to me over the phone.
“What’s going on with your breathing?” I asked, “I can hardly breathe listening to you. Even more, your voice is way up in the back of your throat. Slow down and tell me what’s going on.“
I should point out a number of VCs also have the ability to build a relationship with their CEOs in this way. It’s something I strive for as well. It very much depends on the personalities involved as well as the will that everyone has to make it work.
The CEO coach is a big deal in my book, especially with first time CEOs but for serial entrepreneurs as well. And it’s something I look for whenever I’m thinking about an independent director for a startup.