ݺߣ

ݺߣShare a Scribd company logo

128icg Re Boards

•
•
R
Ricklawboston

This document provides advice on building a world-class board of directors for an entrepreneurial company. It discusses the importance of having independent directors to provide expertise, supervision, guidance, reality checks, and connections. The document recommends recruiting directors based on the skills and experience needed by the company. It also discusses finding directors through personal networks, investor connections, and other boards. The document emphasizes compensating directors primarily with equity and establishing clear processes for board meetings and communication.

1 of 17
RM L Building a World-Class Board Advice for the Entrepreneur Richard M. Lucash 128icg October 9, 2009
RML Background  B. Sc. MIT, Physics  J.D., Cornell Law School  Founder, “boutique” law firm focused on tech companies  Partner in national firm  Founder, LaunchPad angel group  Now: Consultant, Advisor, Director
RML What’s a Board? Board of Directors Legal entity Power; responsibility Fiduciary duty; liability Board of Advisors Not “legal” Sense of responsibility No legal power No liability (yet . . .)
RML Why a Board?  Legal requirement to have one  May be the founders/shareholders  Some investors will be added  “Outside” directors
RML Why You Want Independent Directors No one knows everything or everyone they need to  Expertise  Supervision  Guidance  Reality Checks  Rolodex
RML Recruiting Determine what the company needs Skills Experience in related field(s) Marketing Customer side Company side Connections Variety of all 3 – 5 year time horizon
RML Recruiting Personal Interview Not family members Not the company’s lawyer, accountant Not multiple founders
RML Investors as Directors One or more may be mandatory Quality should be a factor in selecting investors
RML “Independent” Director Often a requirement of investment deal Pay attention to the selection Could be the tie-breaking vote on your job!
RML Finding Outside Directors Your network Networking groups: 128icg Investors’ rolodexes Other Directors’ rolodexes Advisors’ networks – use your attorneys, accountants etc.
RML Other Requirements Available Mentor orientation Will work for equity Will move aside when company evolves
RML Compensation Equity Equity Equity Vest 2 – 4 years Restricted Stock or “Reverse Vesting” options
RML Compensation 10% of company after last pre-venture round 1.5 – 2.5% per director 2x that for active outside chairman
RML Working with the Board Managing Upwards Be the chairman Regular meeting schedule Advance draft agenda; request comments Advance info packet
RML Working with the Board Regular communication between meetings Email In person Form Committees – e.g. compensation Honesty; Full Disclosure Periodic Evaluation and Board/Member self-evaluation
RML Discussion [See MHT July 25-31 p. 14 for article]
RM L Richard M. Lucash Lawrence Associates 396 Washington Street Wellesley, MA 02481 Phone: 781-237-9044 E-mail: rlucash@lawrenceassociates.com

More Related Content

128icg Re Boards