When people decide to start companies, they realize the necessity of covering numerous bases while they are in the business planning stage. These include financing, staffing, customer and competitor analysis, marketing, sales, and others. Another very important consideration, say many successful business leaders, is building a strong board of directors.
A board composed of individuals who are vested in your business’ success is a valuable asset in any organization. They provide leadership, advice, governance, and the benefit of experience as you grow your company from startup to full-fledged organization.
Or, to put it more formally, Kauffman Entrepreneurs’ website defines a board in this way: “A board of directors is a formal construct for every company that essentially provides governance for the company.”
For startups, boards can be very helpful in steering the ship, so to speak, especially in the early days when so many people in the organization are finding their way through the entrepreneurship maze. Additionally, board members help ensure that the company’s investors are well-represented.
According to tech startup veteran SamerHamedeh, founder and CEO of Zeel, and Adam Dinow, a corporate law firm partner, developing your board early is a must.
They write, “You must have a board to handle corporate matters like issuing stock, setting up a stock option plan, authorizing a fundraising or getting loans.”
While it’s been suggested that hiring an attorney to identify potential board members is advisable, especially in a new company, there are other ways to match individuals and companies.
Christopher Kape is a successful Vancouver business leader who nearly 20 years ago founded the strategic advisory firm, JAMCO Capital Partners Inc., which focuses on a number of industries, including gaming, high tech, food and wellness.
His work has given him access to a wide and diverse range of companies, some of which he’s joined as a board member. For example, among others, he serves on the boards at The Pie Hole, a popular bakery with locations in Vancouver and Burnaby, and Riversol Skin Care, a Canadian company that manufactures high-end hypoallergenic, cruelty-free skin care products.
“Board service benefits all parties involved. For the entrepreneur looking for growth opportunities, it can be a networking goldmine. It widens your circles and gives you a lot more reach,” mentions Chris Kape.
As the person who helped make these and many other Canadian startups possible as their financier, Kape has a vested interest in their success. He’s one of a number of board members who are integrally involved in the companies they serve.
Another is NavinChaddha, leader of Silicon Valley venture capital firm Mayfield.
“In my two decades as a venture investor,” he writes, “I’ve served on about 50 startup boards. I’ve had the privilege of working side-by-side with experienced independent directors, operating executives, and venture investors. I’ve come to learn that empathy, curiosity and hard work are among the most important qualities for a truly great startup board member.”
Many startup owners and founders appreciate the talent embodied by their board members, especially since at least some degree of the entrepreneurial journey is often a learning experience. This is why it’s important to have seasoned leaders on your board.
“Individuals with successful track records bring operational expertise based on pattern recognition,” writes Adam Dakin, managing director of Dreamit Health Tech. “They help steer you away from the rocks. Equally important, they roll up their sleeves and do not panic when inevitable setbacks or crises emerge. Said another way, good board members recognize and solve problems well before they reach critical levels.”