There’s been a lot of talk lately around board members. With all attention on Uber these days, the questions continue to circle around the dynamics of power at the board level, what they did and didn’t know, and more recently what the newly expanded board will do, as Uber looks to this time of introspection. Luckily the case brought against former-CEO Travis, by early Uber investor Benchmark, will be moved to arbitration, allowing us all to avoid a nasty public battle.
Let’s face it, VC’s have never made the best board members.
They may be connected enough to the company to sit on the board, but very few ever do anything past staring at their phones, and often input is spotty and unhelpful. Too many board members take meetings too lightly. They don’t make introductions, they don’t have any knowledge of the company or the environment and, worst of all, they don’t care that they’re not adding anything. The board isn’t just a group of people. It’s not a hang-out or a place to text. A board is a team meant to provide value to the company and every member needs to approach meetings with this goal. So what should companies expect out of their board members? What does the role require and how can board-sitting investors make their time count, instead of simply counting the time?
Let’s start with the level of involvement. Every board member should contribute in some way to the success of the business, regardless of their experience level. VC’s sitting on boards need to be thinking about the next fundraise, introducing potential customers or new partners, and searching for future talent. Capital, revenue, and talent, and likely in that order. They should be involved because otherwise there’s no good reason to sit in that room.
But it’s still not enough to make introductions; questions need to be asked and opinions need to be voiced. A silent board member or one who simply serves as an echo chamber, does nobody any favors. What’s needed is a person with a strong eye for the industry, an understanding of the business and the ability to speak their mind to the rest of the board.
It’s with this goal that Sway Ventures was formed. As entrepreneurs, we remember each and every board member we had; the good, the bad, and the silent. Now, when we place someone from our team on a board, it’s a prerequisite that they provide real feedback, give real advice and actually serve a purpose.
This shift in the mindset of VC’s is a healthy and needed discussion. The way venture capital is viewed by founders seems to be shifting in a positive direction, much of that has to do with the journey the industry has been on since the early days. If you take a very macro view, from the 1960’s to the late 1980’s, VC’s were primarily focused on deal origination. Then in the 1990’s through the 2000’s, we saw VC’s become pseudo investment banking arms, investing as well as orchestrating exits for their portfolio companies. At the beginning of this current decade, many started to ask if the model was broken. Fred Wilson from USV even questioned the ability for the VC model to scale.
Since that time, it seems we in the community started to realize that transparency cuts both ways. It really feels like the past few years have been a turning point for venture. From where we sit, the new normal for board members needs to be the previously mentioned themes of: capital, revenue and talent. It’s this model that I constantly remind myself of when I sit on boards.
After all, if you’re not bringing something to the table, you shouldn’t be at the table.