I recently read Brad Feld’s thought provoking piece encouraging founders to sit on the board of another startup company.
We live in an era where the press espouses the entrepreneurs who have five startups. I’m not one who has subscribed to the “superman founder” narrative.
So I was intrigued by Brad’s post. You should read the post in its entirety – it’s a great learning piece. But for now, the summary is:
- You’ll extend your network.
- You’ll view a company from a different vantage point.
- You’ll be on the other side of the financing discussions (a board member, rather than the CEO).
- You’ll understand “fiduciary responsibility” more deeply.
- You’ll have a peer relationship with another CEO that you have a vested interest in that crosses over to a board – CEO relationship.
- You’ll get exposed to new management styles. You’ll experience different conflicts that you won’t have the same type of pressure from.
That’s a pretty compelling list. So I thought a bit more about it. And I think Brad’s 100% right. But I also agree with his warning,
“I usually recommend only one outside board. Not two, not three – just one.”
I have seen this first hand at awe.sm (coincidentally, a company in which Ryan McIntyre from Foundry Group is also on the board).
We have Ian Rogers, the CEO of Topspin Media on our board. I think it’s been tremendously helpful to us because the founder of Awe.sm (Jonathan Strauss) has a mentor who is going through similar issues but is a few years ahead in terms of company development. I’ve always wanted to work with Ian so it’s been a great experience for me, too.
In some ways I see it like the development of kids who learn more from watching their older siblings than by learning from their parents. And the outside director adds a “non investor” point of view. I personally like to see this board member invest pocket money in the company so they at least have shareholder empathy from having written a nominal check.
But I’ll bet that the experience has been great for Ian, too. In the ways that Brad has described, Ian has been able to see the board dynamic from a perspective more distant than having to be the person on the hook presenting his results.
So I’m going to follow Brad’s advice. I’m going to start suggesting that some of the startup founders I work with take a board seat at another startup. I think we’ll all benefit.
Side note: Image is of “team awe.sm” – it seemed a better image than any of the cheesy stock photos of a boardroom. Why are they always so bad? Ryan Carson made me promise not to do it.
(Cross-posted @ Both Sides of the Table)