Earlier this month, Mark Suster wrote a great post titled How
To Communicate with your Investors between Board Meetings.
Mark continues to just tear it up with great advice for
entrepreneurs. However, he left out one thing from the post – which is
one of my favorite pieces of advice for entrepreneurs.
Give your venture capitalists (and board members)
assignments
Mark alludes to this in many of his suggestions but he never comes
out and says it. And, amazingly to me, many entrepreneurs either don’t
ever think of this or don’t feel comfortable doing it. They should.
Most VCs will quickly say that they want to help the companies they
invest in to success. Some will go further and say things like “I’ll do
anything I can to help my companies.” Rarely have I heard a VC say
something like “My plan is to just hang around, go to board meetings,
ask a few nonsensical, low insight, rhetorical questions, eat the crummy
food, and then disappear until the next board meeting.” However, as
any entrepreneur who has ever worked with multiple VCs knows, the
statements a VC makes (or doesn’t make) doesn’t necessarily correspond
to his behavior.
I think you can break this cycle early in the life of your
relationship with your VCs by giving them assignments. At the end of
the first board meeting, spend some time talking about your
expectations for your board members (including your VCs), ask if they
are reasonable, and then go around the table and ask each board member
what they’d like to specifically help with between now and the next
board meeting. Explain that you want to develop a cycle of
accountability for each board member to the company and use this to (a)
develop deep engagement from each board member between meetings, (b)
benefit from the experience and wisdom of each board member on a
continual basis, and (c) set a strong tone for the leadership team (and
the company) that everyone has functional responsibilities that they are
held accountable to. Acknowledge that it will take a few board
meetings to get into a good rhythm with this, but be clear that you’ll
spend a little time at the next board meeting going through individual
assignments, what was done, and what the new assignments are until the
next board meeting.
The assignments should be specific – if they are general (such as
“help with strategy” or “help with the financing”) they will be
useless. Make sure the assignments play to the individual board members
strengths and interests. They should provide leverage for the
leadership team; not create make work. They should be impactful, but
not mission critical.
In companies where the CEO hands out regular assignments, I’ve
experienced an awesome tempo after about six months. The board members
begin holding themselves accountable and the management team is much
more comfortable working directly with the individual board members.
Over time assignments become less “stiff” and the regimen of passing
them out and reviewing them at the board meeting will fade away over
time as everyone gets used to being held responsible for what they sign
up for.
(Image source: southperthbaptist.org)
