You have an idea of how your board is going to function – but next is actually hiring the board members.
The independent advisor we referred to in part two comes into play – you will need an experienced peer to bounce ideas around with, and to make sure that any blue-sky flights are firmly grounded in reality. The earlier you can find the ideal candidate for this role, the sooner you can find a glue that can stitch together the many ideas and personalities that constitute a successful board. With this role firmly in place, we can look at what sorts of qualities you’re going to look for across the rest of the board.
Traditionally the number one of the company, and in start-up stage this is nearly always the founder. Whilst in most cases the board technically hires the CEO, it’s important to remember that the board works on behalf of the CEO, helping with direction and vision. As the company grows, you as the founder may decide to move on or take a different role, which means the company will hire someone else. Whether choosing between two or more co-founders or hiring later, the essential mark of a great CEO is someone who can deliver on the business plan with growth and results – and a CEO delivering on these is only going to keep investor confidence up.
Chief Revenue Officer
A recurring problem in early-stage tech start-ups is too much focus on the technology and not enough on how to make it profitable. Unfortunately, a great idea alone does not a successful business make. The mechanisms of how you’re going to drive revenue – and growth, further investment, and innovation – needs a champion to ensure they are at the foundations of a company’s future by driving sales and looking at maximising revenue streams. And a CRO – ideally hired sooner rather than later – will aid you in this respect.
As a company grows so does the remit of hiring, with a greater variety of positions and a greater number of people involved. Whilst this isn’t an essential position to have from day one when your start-up is small and intimate enough that new positions will be reasonably easy to manage, it is something that becomes ever-more critical as you grow. Hence, the ideal candidate will have experience of taking small companies and maturing them into large companies.
The FD can give your investors confidence, especially if the FD has been through funding rounds before and knows what to expect. By managing the investments and finances of your start-up, they can help long-term with sustainable growth that ensures you are standing on solid ground. Again, an FD does not need to arrive from day one – they can be outsourced to begin with before a full-time hire is made. Crucially, you might need to change your FD as time goes by – an FD specialising in start-ups may not be so efficient once you’re established, and vice-versa.
That then, is the basic makeup of your board to begin with. Next time around, we’re going to get down to brass tacks – how to run a great board meeting.