Board Skills and Personalities
I really enjoyed Jeff Bussgang's post about American Idol in the Boardroom. I think that he cleverly captured the personality types you need on a Board -- domain expert, cheerleader, and truth teller. The truth teller is usually the person who the entrepreneur gets mad at the most. But, they are the most valuable -- you need people on your Board who will bring objective input to the company from the outside and who will challenge assumptions. You have to remember that investors and Board members are not your friends. You want to have a good, open relationship with them, but you don't want them pulling any punches or worrying about your feelings.
I've often thought that investors tend to bring three types of skills to a company, each person with their own combination. Note that this is different than the personality types that Jeff described. In general, when you finalize outside investment and put your Board together, you want to get representation from all three personality types and all three types of skills below.
Skills from VCs:
- Raw intellectual horsepower. There are many VCs who are just super smart. They can connect the dots faster than anyone else and think through the outcomes of various courses of action. They often may be linked to the truth teller as you want the smartest person to not pull any punches.
- Deep contact network. Most VCs have deep rolodexes and close contacts with people in the industry -- potential partners, acquirers, other entrepreneurs, other investors, etc. You should certanily expect to leverage these networks from your VC. Make sure that the individual you bring on the Board has these connections directly, rather than representing connections that their firm has. Most entrepreneurs will tell you that VCs are generally poor at leveraging relationships that their partners have.
- Attention to detail. You want to have an investor or Board member who will read everything and try to understand everything. A lot of VCs are so busy that they don't have time for the details. But, the management team needs to focus on the details, and, hopefully, one investor or Board member will be digging into these details to make sure that management stays on track.
As you put your Board together, make sure you have a good mixture of these skills and the personalities that Jeff Bussgang described. Think about each prospective Board member along these dimensions and make sure you know how you score them on these scales.
These days, many entrepreneurs are raising angel money rather than VC money. That's a good thing, but it doesn't mean you shouldn't think about your Board. You can still put a Board together with some angel investors or industry people to give you an independent, outside perspective. Too many times I see very early stage companies that don't put a real Board together. These companies tend to 'breathe their own exhaust' for too long and lose site of where the real market opportunity really is.
Are there other styles or skills that you would like to see from Board members and VCs?