In a previous article we looked at the keys to effectively manage a board of directors. In this article, we’ll talk about how to build a high-caliber board (it’s applicable for advisory boards or a formal board of directors).
Who am I looking for?
The most important step to finding a board member is to know exactly what you’re looking for. To start, make a list of your own biggest strengths. If you have a C-level team already in place, include their strengths on the list as well. In this step, you want to document where you and your team excel.
Next, write down where you want your company to be in five years, and who you want to be as a leader/CEO in five years.
Finally, identify what the gaps are between where you are today and where you want the company (and yourself) to be in five years. Generally, the gaps may include items like experience navigating fundraises, experience scaling a fast-growing company, experience as a CEO of a fast-growing company, perspective on when to launch new products (and how), insight on how to build and execute the most effective go-to-market strategy, experience building a national sales team and other qualifications.
Of this list, there are some skills that will be critical to have internally on your team versus rely on outside advisers. Make note of those. What you’re left with is the starting point of a list of qualifications for board members you want to seek.
It’s important to note that often the most valuable board members are those who don’t just understand the business and industry, but can help you as the CEO become a better leader while also navigating the difficult decisions you’ll be constantly facing. People like that know what goes into building a successful company.
For that reason, there are two qualifications that I believe are important to include on your list:
- Experience advising and working with CEOs or being in a C-level position.
- Time availability to commit to being a board member. It’s wonderful to find the perfect person, but if that person doesn’t have the bandwidth you need from him or her, you’ll never optimize the relationship.
How do I find the right people?
Now that you have a list of qualifications, let’s figure out who meets those criteria.
Brainstorm a list of the roles that people may have held who retain those qualifications. Is it a current or former CEO? Is it a founder who scaled a similar business? Is it a CMO or vice president of marketing at a major corporation? Is it a vice president of sales who took a company from $5 million to $50 million in revenue?
As part of that, create a list of companies where you think people like that may have worked. I’d encourage you to exclude your competitors. Often times those are terrible targets for board members, because if someone previously worked at a competitor, he or she may not want to be on your board for loyalty reasons or may not be fully open with you. You could waste a lot of time chasing the wrong people if you do that. Focus on companies that are similar in nature but not competitive.
Where the rubber meets the road…
This is where you start to leverage your network and get creative with ways to access the people you want on your board.
When I was a young C-level executive of a growing company, I found amazing advisors by asking for referrals from our attorney. Good attorneys often know lots of CEOs. Accountants can also be good resources as well as investment bankers and other service providers.
Ask other founders, particularly founders of companies who are a little further along than your company.
Search LinkedIn. You can pinpoint people and then figure out if you can get a referral to them (always the better route), or don’t be shy to reach out to them directly.
Lastly, be a hustler at industry events whether its trade shows, conferences or networking events. You might not meet the person with those qualifications there, but you might meet someone who knows your ideal board member.
From an investor perspective, we like to see founders and companies that have surrounded themselves by strong advisors. It gives us confidence in the company’s future and that the founder is savvy enough to find smart people to guide him or her.
As much time as it may take to build a strong board, it’s a group of people you, the CEO, will spend a lot of time with and who will make significant contributions to your company if you select the right advisors.
Luke Vernon is a managing partner of Ridgeline Ventures, and an operator-turned-investor, having led Eco-Products from under $1M in revenue to $80M before it was acquired. Luke has advised and founded several other companies, including Luke's Circle which helps emerging companies find top talent.