Another session at Allegis Capital’s recent Limited Partners meeting focused on how venture-backed startup CEOs should view their board meetings. CEO consultant Darlene Mann offered some helpful tips to our portfolio entrepreneurs. Darlene is a startup CEO advisor, former CEO from startup Siperian, and a former general partner at Onset Ventures. I have known Darlene for years and her packed presentation reflected the interest in the topic.
Here’s what Darlene highlighted:
- Remember to BE the CEO and own the management of the board meeting.
- Don’t let the VCs treat you as if they are your boss. YOU are the CEO.
- Don’t surprise your directors in a board meeting.
- Don’t present your report card in a board meeting.
- Don’t overload the agenda of a board meeting.
- Don’t “spin” things and, in particular, don’t make commitments you probably cannot meet.
- Remember to appreciate the nuances of the venture capitalist/CEO relationship and role.
Relationships are paramount with your directors. When you are dealing with your board, always remember the nature of these relationships. Board members are not your bosses. They are your colleagues, and they expect you to act like a leader.
You are being judged every time you run a board meeting. Remember the opportunity is always present for a board member to say: “Yes, she/he’s our CEO. Should he be our CEO? If you let board members treat you like they are your boss, they will quickly conclude you are not the right CEO.”
Remember that the board meeting is all about business. As much as you may like some or all of your board members, you are running a business. Always be well-prepared. Be attentive to your appearance, how you are dressed and even when you should sit and when you should stand. At the same time, be yourself. Intelligent people can always spot a game player.
Make a point of understanding the VCs on your board and their respective roles. On the one hand, they want you do well and ultimately increase the overall size of the pie. On the other, they don’t want to take undue risk and risk losing their capital. Which way they are leaning can vary from one board meeting to the next, and part of your job is to be sensitive to their shifting emotional states. Also bear in mind that different venture capitalists have different agendas, especially if the startup has attracted a second stage of financing. Some want your company to be sold (depending on how the company is doing, and how much money they have already invested) if they can make three times their investment; others want to swing for the fences.
Don’t present a report card at the meeting. Board members want to know what has happened since the last meeting and what it means, but they don’t have time to listen to a full-fledged progress report. Don’t have all your directors come in and present every meeting. Pick what is important to cover (however, face time with the board for your team can be very helpful in terms of your own management; just don’t have all of them every meeting).
Even more important, don’t surprise board members. About a week before the board meeting, call each director, tell them about the upcoming agenda and ask them whether there is anything in particular they want to discuss. Make sure you have prepared a discussion checklist before the board meeting itself. If you have bad news, make sure you get it out early and have thought through several options prior to the board meeting. That way it can be a strategy session rather than a nasty surprise. If things are going exceptionally well, don’t sand bag too much. Big surprises in either direction are not a good way of building your credibility. One of my CEOs tends to beat plan slightly every time we meet. He over communicates in between meetings with a comprehensive report on company status sent monthly. Not only does this add to his credibility, but it makes the board meetings much more efficient, and puts the onus on the investors and other board members to be up to date on the company and management’s strategy. By the same token, when he has bad news, or areas he is unsure of, we hear about it as soon as he has had time to figure out the issue, and come up with several alternative solutions. This upfront effort pays off in the board meetings.
Lastly, make sure you’re on top of your game before the meeting. Make sure you get a good night’s sleep. If for some reason you feel unprepared, call the meeting off. Never lose sight of the fact that these are very high-stakes meetings and that attendees are always expecting a top-flight performance from you.
Darlene’s presentation was very well received by our entrepreneurs (It must have been, because nobody left their seats the entire time). I have attended tons of meetings where CEOs don’t do what is suggested here, and it increases the challenges they already face running a venture backed startup. These guidelines are very powerful and can help make you better.
Click here to View Darlene’s presentation.