Investors relations are important for various reasons apart from your legal obligation. If done correctly, your first investors can help you with future fundraising or tap into their network or operating experience to overcome any hurdles for your startup. Thus, it is also important to select the right people who will sit on your board and advise you. Our curated list of resources below will make it easier for you to maintain investors relations, but also help you put together the best board members for your startup.
- Board members
Board members are good in most ways, but bad in an important few. Founders’ desire for control is good in moderation but hurts companies when it gets taken to extremes.
Many founders generally want few to no outsiders on their boards. But great board members, with a lot of experience seeing companies get built, are the sort of people founders should want thinking about their companies every day. There are a lot of roles where experience doesn’t matter in a startup, but board members usually aren’t one of them. Board members are very useful in helping founders think big and hire executives.
Thinking about boards makes entrepreneurs imagine instituting process-laden corporate governance, spending hours drafting lengthy board presentations and potentially losing control of their startups. In reality, every startup is legally required to have a board. But there is ongoing debate about whether that board should include anyone other than the founder(s). An outside Director, specifically one representing investors, is tremendously valuable for seed-stage companies.
Hear from a CEO’s journey about what characteristics to look for in a board member.
In early-stage startups, founders tend to be the CEO’s and have a majority stake in the business. The ownership/management dynamic is not as pronounced as it might be in a big company – and there’s less need for managerial oversight.
This means building a board isn’t seen as a priority in the early days of a startup’s life. It can suddenly become a priority when investors start to demand board seats in order to influence the process and structure around governance.
Forward Partners have seen many entrepreneurs succeed in, and others fail at, constituting a board of directors. Check out their advice.
Your board works on your business, but they don’t work in your business. Every time you meet with them, you have to show them where you are and what help you need. In other words, you need a board pack.
Your independent board members will typically be other operators or entrepreneurs with relevant functional experience (e.g., a former CFO) or industry experience. While some series A investors won’t push for the independent seat to be filled for a while (or, in some cases, at all), others will push for a faster addition to the board.
So you’ve raised your first round of financing, hired some key team members and are off to the races. Your new investors are aligned on your vision and the goals that you will need to achieve in the next 12–18 months. They have studied the risks, vetted your assumptions, and understand the critical hypotheses underpinning your strategy. After few months, your investors have asked for an update. What should you do and why does it matter?
Board meeting deck templates for seed-stage startups, now in conjunction with an investor update email template.
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