Brad Feld

Category: Management

Following are some board meeting rules that were recently presented to me and my fellow board members by a CEO at one of his first board meetings at a newly funded early stage company.  I thought they were brilliant.  Feel free to pass them out at your next board meeting.

Be supportive of the company: Tell us the things we do right and things we do wrong.  We are figuring this out as we go.  “No comment” is hard to interpret and our imaginations will run wild.

Be responsive to communications: Please ACK emails.  If you can’t respond when you read, set expectations when you can.  At least say “ack.” I’m generally on email all the time and it’s a real-time communications tool for me.

Be transparent: We have personal relationships around the table.  Management should not use board members as “agents.”  I don’t want any politics on the board – if I did I would still be going to board meetings from my last company.

Be specific and descriptive: I sit on a board also.  I know the temptation to speak in strategic generalities.  Please include concrete examples that smaller minds can digest.  I give extra credit for using more words.

Look for opportunities: You generally cast a much larger net than we do.

Look for early revenue opportunities: Making money will never go out of style.  Generally everything is easier with revenue.

Look for partnerships (Panda Mating): Early stage companies need help with partnerships largely because we don’t have any of particular value yet (like people, brand, data, and money.)

Look for dead-ends: No one wants to hit the wall at 120mph.  You’re more experienced so you should see the wall coming before we do.  Don’t grab the wheel – just tell us to look down the road.


Scott Converse – the CEO of ClickCaster – has a long and very personal post about his experience in the run up to his first board meeting.  I’m sure he’ll have a follow up post after the meeting today.  If you are a first time entrepreneur who has just raised money, or are just starting to have board meetings, Scott’s perspective will be additive to your world view.


NDA’s (Non-Disclosure Agreements) seem to be floating around this weekend.  I guess whoever leaked the rumor of Google’ acquisition of Youtube hadn’t signed one.  I got the following question from a reader:

We have a partner that we want to work with. They have both overlapping technology but also crucial technology and knowledge that would take a great effort and time to acquire. We know for sure that this company has recently been or is in the process of being acquired. (by a top 10 media & technology company). Our partnership has never entered into a formal agreement but we are now at a point where we want it to be formalized. They want us to sign an NDA to continue the process, which in any other case would be totally normal. However, things have changed slightly and we’re not dealing with a startup anymore but a major media & technology company. Is there a way we can agree to sign an NDA and at the same time protect ourselves from the lawyers from their acquirer if (potentially) our technology, product or business models is conflicting with theirs? They don’t know that we know the details of the acquisition.

Feeling lazy tonight, I passed it on to Jason who provided the following answer.

Let us start by saying that you should definitely consult your attorneys on this.  That being said, here are some things to consider.  Since you already have a relationship with this company and you both realize that you have some overlapping technology, it wouldn’t actually seem unreasonable for you to explicitly limit the NDA to your partner’s company and not its successors.  This shouldn’t tip any hat that you know about the potential acquisition, as it would be a standard thing to ask for given your current relationship.

Where you may run into a problem is if your partner has their attorney review the NDA in light of the potential acquisition.  They’ll want the NDA to run to the acquirer.  In fact, them signing an NDA without running to an acquirer would not be wise for them to sign, but in our experience, most companies do not use legal counsel to review NDAs, so you might have an easier time at this than you think. 

Now if this isn’t possible, then your best fallback position is to limit information pertaining to the NDA to information given to you by certain individuals of the company (so that acquirer employees aren’t covered) and to keep the time limit as short as possible.  This is clearly a sub optimal solution, as the acquirer is still acquiring the rights under the NDA, but at least it is limited post merger.


As Jim and I continue our Board Meeting series, we’ve decided to address a question that we are often asked – “How Many Board Meetings Should A VC-backed company have?”

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.


Pascal Levensohn – the founder of Levensohn Venture Partners – wrote a comment to my post title The Agenda (in the Board of Directors series) that I wanted to promote to a full post (since I expect only some of you read comments.)  Pascal linked to a presentation he used to moderate a panel on Best Practices for Running a Board Meeting.  Excellent stuff.


The Agenda. This little one page document sets the tone, pace, and content of your board meeting. It’s fundamental to the success of a board meeting, so you’d think it wouldn’t be as screwed up as often as it is. As Jim Lejeal and I continue our Board of Directors series , we thought we tackle this subject next.

Once you’ve attended a number of board meetings, we expect you’ll reach the conclusion that a good agenda can make a big difference in the quality of a board meeting. The most common mistake is that there isn’t an agenda; the second most common mistake is that when there is an agenda, it’s not followed. We’ve found the latter to be the more pervasive – it’s easy to put together a boilerplate agenda and use the same one meeting after meeting, but the board meeting itself covers a different set of issues and travels down a path that would cause an observer of the meeting to think the agenda and the meeting existed in parallel universes.

A good agenda is one page long, has each topic clearly articulated, and lists the length of time expected for the topic and the person responsible for leading the discussion. There should be no surprises in the board meeting – the agenda should be clear about what is being covered.

We suggest that – as a starting point – you destroy the boilerplate agenda that your law firm gave you and start from scratch. Ask a few of your board members for sample “good agendas” from other boards meetings for boards that they think run well. Use this as a background, but create an agenda that is specific to your board meeting. Create a new agenda for each board meeting – don’t fall in the rut of copying the last meeting’s agenda.

Order the agenda so that the topics that are the most important to address in the meeting are covered first. A common mistake is to save the important topics for the end of the meeting. This is often done to facilitate a closed session of the board to address these topics. However, board members often have time constraints (other meetings, planes to catch) where they have to leave around the time your board meeting is scheduled to end. By putting the important issues last, you run the risk of having half your board leave mid discussion of the company’s pressing issue – or worse – you unneccesarily rush through the issue, raising the risk that the issue at hand isn’t properly vetted or understood by your board.

Circulate the agenda to your board in advance and get feedback that you’re covering topics that you and your board feel ought to be discussed. If your board has a Chairman or a lead director, enlist him to help you with this. A side note to all you frustrated board members out there who feel that management doesn’t cover the pressing issues you’d like to see covered in your board meetings: an agenda circulated in advance of the meeting is your opportunity to schedule the topics you’d like to see addressed.

Assign time blocks to each item that are reasonable allocations of the meeting time. Stick to the time constraints. If your board culture is to involve members of management in the board meeting, review the agenda with your team and discuss the time constraints in advance. It’s frustrating when a discussion on say – Marketing – that is assigned 10 minutes (often 9 minutes more than is necessary) is allowed to consume 45 minutes of your meeting. Schedule breaks and stick to the allocated time.

Don’t simply copy the flow of your board report on your agenda and spend your board meeting talking about what you’ve already delivered to your board in written format. While portions of your report deserve discussion in your meeting, performing a page-flip-read-and-review of your written report is a huge waste of time (and nauseating to your board members that can actually read.) Presumably your board has already thoroughly read your board report (if you don’t think they have, make sure you’ve set the expectation that you expect them to do this) – they don’t need you to re-read it to them in your meeting. Give your board time to ask questions and discuss any issues in each operating area of the business, using the written text as a backdrop.

With respect to the financials, you should ignore what we just said above. A financial review should be performed at every meeting along with a page-flip-read-and-review of the primary financial statements regardless of how well your board has studied the financials in advance of the meeting.

Make sure that you’ve allocated time for your voting issues and identify what these items are in the agenda to ensure you vote on all of them.

Finally, pay attention to the silly little details. Include the time and date for the meeting on the agenda. If you have the potential for board or management team members to call in, including the dial up number (if it’s a toll free number, include a local number for the board members calling in internationally.) Include the contact info for someone at the company that can assist any board member with directions or logistics in case they have difficulty getting to the meeting or dialing in. Include information for meals if you are having them.

When we started this point, we talked about a “good agenda.” Your board agenda doesn’t have to be “great” – “good” is fine. However, a “good” agenda can help you with the ultimate goal – that of a great board meeting.


I expect The Chairman post I just put up will be controversial.  If you have a different perspective, or a bad experience with a board that has a chairman, please feel free to weigh in.

Also – I’m still thrashing around a little with Writely and its blog posting feature, so if you got two copies of the post in your feed (one starting with the title “Rob Shurtleff – a”, please ignore that one – the correct post is “Board of Directors: The Chairman.”

And – no – not all of the boards I sit on have a Chairman.


Rob Shurtleff – a VC in Seattle with Divergent Ventures – whom I’ve gotten to know over the past year, dropped me a note with some ideas about a few posts in the Board of Directors series that Jim Lejeal and I have started writing. The first topic Rob suggested has evolved into the a post titled “The Chairman”. Through the magic of Writely, I’ve involved him into a group edit on this post – what has resulted is a collaboration between the three of us.

In the public company arena, more and more companies are separating the Chairman of the Board position from the CEO. It turns out that this trend has benefits for earlier stage companies too. We believe that all CEOs – regardless of their experience – benefit from having a lead director on the board. In general, it has been our experience that boards (and the board meetings) work better when there is a Chairman in charge other then the CEO.

Some specific roles for the the Chairman follow:

  • Collects input from all directors and management on the board agenda – this facilitates surfacing difficult issues.
  • Creates the board meeting agenda with the CEO.
  • Runs the agenda of the board meeting, holding items to schedule or extending the time spent on them if the consensus is to spend more then the appointed time on an item. This frees the CEO to focus on content and allows the Chairman to keep the meeting on track.
  • Hosts an executive session without management at the end of the meeting in order to gather feedback, surface issues, and frame constructive feedback for the CEO and the management team.
  • Reports any relevant feedback to the CEO.
  • Collects input from the board and from the senior management team for the CEO’s annual review, writes the review, presents it to the board for approval, works with the compensation committee on CEO bonus and changes in compensation, and finally meets with the CEO in a formal performance review.
  • Heads the search committee when hiring a new CEO.

In addition to being a focal point for the board, The Chairman can also be a critical mentor for the CEO. As a result, he should be a consensus choice of both the board members and the CEO. In addition, the Chairman should be a person who is made visible inside the company – such as attending and participating in all hands company meetings. The Chairman should make themselves easily available to employees (via in person, email, or phone) at any time. If bad things are happening within the company (e.g. date manipulation of stock options) employees should have a person on the board – namely the Chairman – that they are comfortable going to with any issues.

Some of the CEOs we have worked with have resisted this idea. Most have come to see it as a big plus. We’ve also found that – in most cases – boards also benefit from having a lead director as a focal point.


Jim Lejeal and I have worked together for almost a decade – I was one of the investors in his last company – Raindance Communications (now part of West Corp) and am an investor in his new company, Oxlo Systems. Jim also has a lot of experience as an angel investor and a board member for startup companies. In response to my other posts on boards, Jim suggested that we co-author a “Board of Director” series similar to several other series – such as the Term Sheet series, the Letter of Intent series, and the 409A series that Jason Mendelson and I have written. A few emails later, we had a rough outline. We hope you enjoy it (and feel free to suggest topics.)

In understanding the role of a board and blogging about good board meeting practices – we thought it would be beneficial to start by reviewing some basics surrounding the notion of “being a board member”; specifically a board member’s fiduciary duties.

A board member’s fiduciary duties are based in or upon what’s called the business judgment doctrine. This is a case law derived concept that, through time (a long time actually) has declared two primary duties: the duty of care and the duty of loyalty. Recently, there has been some discussion around two more duties (specifically – the duty of candor and the duty of good faith) which we’ll cover in a later post.

The business judgment doctrine is essentially a concept in business law that outlines the notion that a court won’t review the actions of a corporation’s board of directors in managing the corporation unless someone suggests that the directors 1) violated their duty of care or their duty of loyalty or 2) made an irrational decision.

In direct terms – this means a court won’t play 20/20 hindsight and rethink a board’s actions or decision if it’s reasonably clear that the board made rational decisions and acted within the notions of their fiduciary duties. Implied in this are standards of conduct that, having been broadly explored in many courts, are generally well understood (although this doesn’t prevent endless shareholder lawsuits around directors responsibility, especially in situations where a public company fails and there is a meaningful director & office insurance policy in place.)

We decided to start here because being a board member means doing work. And it’s work that has real risk associated with it. Taking a board set without being familiar with these fundamentals is sort of like performing a laproscopic gall-blader removal procedure after two years of medical school – you might be able to get through it, but it won’t be pretty, and the patient will probably be miserable. While the fundamental risk dynamics – especially today with the legal and regulatory overhand of Sarbanes Oxley – differ between public and private companies, the responsibilities are the same. That said, our perspective and experience derives primarily from private companies (although both Jim and I have been on public companies boards) – that will be the focus of this series.