Hello, everyone. This is Alejandro Cremades, and today we’re going to be talking about
what to expect from board members. Board members are incredibly powerful for any startup. They’re
going to determine many, many critical aspects of the business; it’s also going to add
a lot of credibility depending, obviously, on who you have. In today’s video, we’re
going to be breaking it down for you so that you have full visibility and understanding
when it comes down to what to expect from any board member. With that being said, let’s
get into it. What is a board? A board of directors is ultimately
that group of individuals that are sitting at the top helping with the strategy and the
CEO, who is reporting to the board with any aspects that have to do with the execution
of the business. They are ultimately providing that strategy and handling that strategy to
the CEO and the management team so that they get to execute.
The board has a fiduciary duty to the investors, and they have the responsibility to always
look for the best in the business, and they can ultimately fire the CEO. So they have
that level of power. Again, the board is supercritical and very critical, especially when it comes
to the strategy of the business. Who makes the board? Ultimately, you’re
going to have people that are from management, investors that have also invested in the business,
and then outsiders that perhaps you’re bringing in. Some of those roles or members of the
board are the following. The Chairman of the Board
The Vice-Chair The Treasurer
The Secretary Founders of the business
Investors and partners of venture capital firms that invested
Advisors Board observers
So, when fundraising, a critical piece is going to be the board. People that are ultimately
leading a round of financing, which is putting a price tag so that everyone else can come
and invest; those are going to demand that they get a board seat so that they can continue
to oversee and monitor how that investment is performing over time.
What to fear and expect from the board. Ultimately, those members that are part of the board are
going to have a lot of power, and there are definitely things that you should expect from
them like essentially being able to bring them some of the critical issues, the strategic
issues that you’re facing on the execution side so that they can help at a strategic
level in order to find some of the answers. Maybe even opening doors that can essentially
bring those solutions to the problems that you’re facing.
Now, when it comes to fears, some of the biggest fears could be some of the following.
Voting on your personal compensation The ability to fire you from your own startup
Failing to act on or accept great M&A offers to acquire your business
Failing to act, as well, on fundraising rounds Yes, they can actually kick you out of the
business. They can even block a potential round of financing or your company getting
acquired for millions or billions. So that’s why you want people on your board as members
that are ultimately aligned with your vision and your mission and that you really get along
with. When it comes down to what you want from your
board members, you’re definitely going to want them to have operational background expertise,
meaning that in the past, they have actually executed a business or they’ve had experience
with your own segment, so that they know some of those critical issues that you’re ultimately
facing. Another thing that you want is that they have
a great network. That network can actually be applied in different things. It could be
a network of talent; mainly, they have access to people that you can potentially recruit
over the course of time. It could be a great network when it comes to distribution.
Maybe they can just lift up the phone and help in securing some of those great partnerships
that are going to help with scaling things much faster and quicker on the distribution
side. They could also have a network that it comes down to investments. Maybe they can
just lift up the phone and make that introduction to an institutional investor or any kind of
investor that could put an investment in your business.
Another type of thing that they could bring to the table is experience or perhaps contacts
around potential acquisitions. Maybe they know people that they can actually call or
maybe facilitate an introduction to that can ultimately be interested in acquiring your
business. Those are ultimately some of the best board members, and you definitely want
to make sure that you’re taping on their networks.
So we would love to hear on the comment section below how you’re thinking about putting
together your board and the members that you’re going to be assigning to it. Also, subscribe
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tremendous value in it. So, thank you so much for watching.