Kyle Murphy is a Technology CEO and investor. In this video he gives advice on how to choose the right board of directors for your company.
- Avoid friends and employees
- Experience to guide through pitfalls
- People who can open doors
Choosing the right board of directors in a startup is much more important than most people realize. Often it’s filled with friends and employees or it’s not even there and I think you’re really missing the opportunity that you need. It’s less about governance and it’s more about helping the company succeed.
So, you know, first, avoid the friends and employees. They’re not going to bring any value to the company than they already do in their current position and they don’t really properly bring the proper governance that you do need in the legal case.
What you want to is to find experienced executives, managers, industry experts, even academics who can guide you through the pitfalls in raising capital, growing a company, even just doing that first sale.
Also is you want somebody who can open the door, someone who has access to either your competition -- not your competition but the competition of clients or customers or just really has an expertise in the space that can guide you.
And then the last thing is -- is this board of directors are giving you value, so make sure you compensate them. The general rule of thumb is, is a half percent, stock optional warrant every year for service, 2% total of four years, it’s a pretty simple thing. But the right board of directors can make a difference in you succeeding and failing. Just pick the right people.