Our general answer is “as many as you should for the stage of the company that you are.” We define stage loosely, where you evaluate the company’s revenue performance, the rate of growth of revenue, the headcount of the company, and the strategic issues the company faces. If you – dear reader – are a rational person – you should be responding with the thought “thanks guys – not helpful.” Stay with us – we’ll try to be more prescriptive, but – having been involved in lots of companies, with lots of different boards (and board dynamics) – we know there is no simple and correct answer.
Our experience suggests a private, venture-backed company should have between 8 and 12 meetings a year, with at least half of them face to face. As a company grows and matures, the number of in person meetings will logically decrease, but should never fall below one each quarter, preferably in the first month of the quarter so the performance of the previous quarter can be reviewed while it is still fresh and current.
If you’ve just closed your first round and it was a seed or Series A financing, expect that you will likely to have monthly board meetings. Yep – you heard us – expect to have 12 meetings per year – and it’s best if these are in person. Try to have your meetings set up on some recurring monthly basis like “the third Thursday of every month”. This helps schedule the board and increases the likelihood that board members can actually attend in person. Also, a monthly meeting which shifts from month to month (for example – the third week one month and the second week in another) may not allow enough time to elapse in between meetings.
Your early stage investors and board members will want to be (and you should want them to be) actively engaged in the company. You’ll be dealing with a huge range of issues in the startup phase – frequent, substantive, and open discussions will help keep all the board members up to speed on what is going on and engaged in the decision making process. Since a lot of significant events transpire at a rapid pace in a company at this stage, these regular meetings help the board maintain a level of awareness that enables them to engage in the activity of the company. In addition, a young board needs to learn how to work together – the best way to do this is “to work together” – regular meetings will reinforce this.
Additionally, CEO’s of venture backed companies (or any company with a board of directors) should expect to have fluid and candid dialog with board members in between meetings. Board member styles differ – some (like me) are email guys, some are face to face types, and some are phone call update types. We recommend understanding how each of your board members works best and make sure you spend time with them in between board meetings discussing issues, updating them on the business, and learning how to work together.
Some of this is preparation for later in the life of a company when a board has to make critical and substantial decisions, whether around a financing or M&A event, major change in the direction of the business, leadership change, legal issue, or something else that requires hard discussions. Spending time building working relationships, learning how each other think, work, and act, and developing personal rapport early in the life of the company helps makes dealing with these situations a lot more effective.
Some entrepreneurs have resistance to this level of oversight. If you’re someone who has a negative reaction (e.g. “12 meetings a year – no way!”) we encourage you to re-think your interest in a pursuing a model to build your business that includes venture capital, or for that matter your interest in having a board of directors.
Finally, while it is common that as a company matures, it will reduce the frequency of formal meetings (to say 6 meetings per year), the board will encounter periods of time where they will meet more often then once a month. This can happen when a company is approaching the end of a fund-raising cycle or during key times in the company’s life where substantive strategic actions are being managed (for example – an acquisition.) During these critical times it is common for a board to have formal – but short duration – meetings, both in person and over the phone.