The great thing about following the hundreds of venture capitalist bloggers is that every now then when one of them writes a rather poignant entry, several other VCs will latch on and provide their opinions on their blogs or in comments. Such is the case surrounding a recent article by Mark Suster of GRP Partners about the “agile board,” a phrase he has coined to explain the techniques startups should use to keep their board members more actively involved in the business. Since being posted to Suster’s blog, Both Sides of the Table, a handful of other VCs have weighed in with their opinions on the subject.
Mark Suster on Practicing Agility
As Suster explains, VCs desperately want to help the companies they are supporting but they don’t always know how. He suggests a few ways founders can involve their board members, including asking for key introductions to important people, keeping them aware of company goals and ensuring they are prepared to participate in the board meetings.
“Some boards I am on only meet six times a year and there is very little involvement between meetings. Those companies might as well not have boards.”
– Fred Wilson
A good way to do this, Suster says, is to briefly check-in with board members on the phone for a few minutes each week to update them or ask for advice. This keeps your company fresh in the VC’s mind and by keeping the calls short shows that you respect their busy schedule. This is far better than the average relationship between founders and their boards, which meet at most once a month under usual circumstances.
Suster’s philosophy is essentially increasing the frequency of communication so that the board isn’t digesting big chunks of information all at once, leading to a more complete understanding of your company. Since the publication of his post on the subject, some other notable VCs have offered their opinions on the matter, including Foundry Group’sBrad Feld, Union Square Ventures’Fred Wilson and Babak Nivi of Venture Hacks.
Babak Nivi and Feedback Loops
Nivi was one of the first to reply, and did so via a comment on Suster’s blog. In his opinion, the focus of the post should have been more about hastening the “feedback loop” between founders and investors.
“Information is part of the feedback loop. What’s missing is changing the board-level plan based on the new info that board members are getting more quickly. An agile board would change its board-level plan more quickly than a board that only adjusts the plan at regular board meetings,” writes Nivi. “You talk more often so you can change your plans more often. The whole point is to change your actions more quickly so you don’t drive the car off a cliff.”
In a second post spawned from Nivi’s comment, Suster agreed that having an agile board is just as much about making decisions frequently as it is about communicating frequently. Action, not just communication, is necessary between meetings to be truly agile, Suster says.
Brad Feld Suggests Specific Assignments
Brad Feld takes Suster’s post to the next level, advising founders to give specific assignments to VCs like a teacher handing out homework.
“At the end of the first board meeting, spend some time talking about your expectations for your board members (including your VCs), ask if they are reasonable, and then go around the table and ask each board member what they’d like to specifically help with between now and the next board meeting,” he says. “In companies where the CEO hands out regular assignments […] the board members begin holding themselves accountable and the management team is much more comfortable working directly with the individual board members.”
Fred Wilson Says Founders Are in Control
Fred Wilson agrees wholeheartedly with Suster on the idea of involving the board more voraciously. As he sees it, the founders and CEOs are ultimately in control of how active their board is, and the difference can be drastic.
“Some boards I am on only meet six times a year and there is very little involvement between meetings. Those companies might as well not have boards,” writes Wilson. “I am also on boards where everyone is highly engaged between meetings. These boards are active in email discussions with the team, they are active in recruiting, business development, even strategy. They are agile boards who add significant value.”
It is great to get a wide spread of opinions on an issue when the VC blog scene latches onto a topic such as this. If you are starting a relationship with a board of investors, it may be wise to discuss from the outset how they will take an active role in the company. As these venture capitalists have shown, more often than not, the more active and aware the board is, the more likely the company is to succeed.
Photo by Flickr user olaf d punkt.
