Benefits of an Outside Board Member

John Babcock, a partner of Rustic Canyon (, discusses the benefits of having an outside board member. Often times a new member can provide fresh ideas to the leadership and strategy of your company.

  1. Prior experience within the industry
  2. Access to their network
  3. Neutral opinion to help resolve disputes

Company usually starts often – the board is really the founders. And then, as you get going, you’ll bring in a venture capitalist frequently like myself. And so your board will be a split of managers and investors.

And as you start to evolve, there really becomes value in bringing a third voice to that, in an outside board member. As you look to select someone like that, there’s a couple of things I look for.

One of the first is industry expertise and experience. You want to have someone who brings some real knowledge who’s done before what you’re trying to do.

One of the things I could really bring is credibility and context. You’re a small company. People haven’t heard of you. But if they’ve heard of you outside board member, it allows you to open doors that you yourself probably couldn’t open.

And third thing they bring is just being that third voice between the management team and investors. You’re going to have some conflicts somewhere along the way between what the management team wants and what the investors – the owners of the company want to do. And it’s nice to have an intermediator there who sits at the board.

Selecting those folks is really important. It’s one of the few times in your life when you’re going to hire somebody for whom you’re going to work because the CEO ultimately reports to the board. And so, it’s a selection you want to make carefully because they’re about to be your boss.