Announcing Projector — A Startup I’ve Been Excited to Tell You About for Years


This post is by Mark Suster from Both Sides of the Table - Medium


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Announcing Projector — A Startup I’ve Been Excited to Tell You About for Years

A few years ago I spent time in prison with Trevor O’Brien, the founder of Projector. Yes, I always imagined announcing the company that way. We were of course there to work with incarcerated men on developing entrepreneurial skills on behalf of Defy Ventures. We had met previously when Trevor was a product manager at YouTube and Upfront had funded the largest video producer on YouTube, Maker Studios.

When we got out of prison Trevor began describing the startup he and his co-founder, Jeremy Gordon, wanted to build. They had worked together as senior product manager and senior engineering leads at Twitter and identified a problem they saw in visual communication of information. They teamed up to solve this problem and when I heard about their approach it completely resonated with me. Upfront immediately wrote a check to back this vision and we later teamed up with their former colleague from Twitter turned VC, Rishi Garg of Mayfield and we’ve stayed quiet on what we were up to.

The vision is Projector, announced today on TechCrunch — you can sign up if you want to try the service. The mission for the company is to to help people communicate clearly and memorably using visual information. Initially that means a creative, collaborative toolset for visual communications, allowing users to develop really compelling slides, print materials or social media posts that are more visually compelling and easier-to-build for those who aren’t naturally gifted as visual story tellers. Over time we will roll out features the help you to understand the full vision of where we will take visual collaboration.

Why does this resonate so much with me?

I believe that the fundamental nature of getting buy-in from organizations to make complex decisions involves visual storytelling. This is certainly true in how startups raise money from VCs. It is true in how founders share progress and issues with boards. It is how sales reps talk to prospects about their products & services to try and gain buy-in for a sale. And it is true in how speakers stand in front of audiences and take them on a journey to buy into a vision of the speaker.

We know that good visual storytelling can be persuasive and we know that it is also important to retaining key information after a presentation has been completed or a report has been shared.

Yet as somebody who has to read and write decks as a major portion of his job I can tell you that most people struggle with how to tell stories visually and when I need to do it I am aware of how difficult the modern

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Managing Your Startup Board — A Short Presentation


This post is by Mark Suster from Both Sides of the Table - Medium


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Managing Your Startup Board — A Short Presentation

I was invited to do a keynote presentation at the Khosla Ventures CEO Summit this week in Sausalito. It was an amazing gathering of some of the most ambitious early-stage CEO’s looking to make a dent in fields related to healthcare, biology, AI and other transformative fields. It’s encouraging to know that there are still great VC firms like KV that are looking to make these short of big bets on shaping the future. Hearing views from Bill Gates on how the world deals with issues like climate change, Jack Dorsey talk about the role of social platforms and government and discussions with Kevin Systrom (Instagram), Todd McKinnon (Okta), etc were fascinating.

My talk was about “managing your startup board” and the full deck is on that SlideShare link and embedded below. I also wrote an entire series on the topic of Startup Boards if you want to do any more reading that link has several articles you can dig into. Below is just the highlight points.

How Do Boards Get Out of Sync?

For years software development worked on a “waterfall model” in which you did research, design, build, test, deploy and then watch how users reacted to your product. Often these projects took 12–18 months so by the time companies shipped product they often found out that the product didn’t meet customer needs. I think this analogy can hold for boards. Often executives are operating their businesses for long periods of time where non-exec board members aren’t familiar with the nuances of the changes in the company and therefore are surprised or unprepared when they come to your board meeting.

I think it may be helpful to think about your relationships as “continuous boards” in which you more frequently send texts or emails or do short update calls to keep investors in sync on the changes in your business. The more you are regularly checking in the more room for course correction or at a minimum the more bought in board members are because they participated in the process.

If you take the mentality that your board members are usually pretty well connected and often willing to be helpful if asked, one of the best ways to keep board members involved is to ask them for help. Yes, there is some overhead in the increased communications, seeking opinions and asking for favors but in the long-run I believe it pays huge dividends in keeping your board aligned and supportive.

Why Does My Board Get So Unfocused at Board Meetings?

In each board meeting it is helpful to think through what your goals are. Are you truly looking for board members to debate and

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My Commencement Speech — Life at Your Crossroads


This post is by Mark Suster from Both Sides of the Table - Medium


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My Commencement Speech — Life at Your Crossroads

Photo by Justin Luebke on Unsplash

Crossroads

Cal Poly Pomona! What’s up!?! I’m so grateful to be up here addressing you today. Today you’re either here to graduate or support somebody graduating. A graduate is at his or her first major crossroad in life. You are faced with decisions about which road to take. That is the theme of my speech today. My 8 tips for the crossroads you will face.

I heard that your school is 5th in the nation at helping lift people born in the bottom 20% income levels into the top 20%. That’s an amazing statistic and reminded me of my family’s journey.

My dad was an immigrant from Colombia. He moved to the US for medical school, the first in his family to ever do this. His father, my grandfather, ended up in South America after fleeing Jewish oppression in Romania. His crossroads were literally life or death decisions, as they are for millions of people around the world today. My grandfather.

HIS grandfather grew up in an era where there were no crossroads. There were no planes, no cars, no easy access to colleges. His grandfather and his grandmother grew up in an era of arranged marriages as much of the world did back then. Even today more than 50% of the world has an arranged marriage. There were no crossroads.

As you face the burden and the weight of your choices please try to recognize what a blessing it truly is in life. It only feels like burden because we live an Instagram, FOMO world where everybody else’s choices seem better. They aren’t.

Choose your path with conviction. Don’t regret the road not traveled. Regret causes anxiety at every level of success or wealth. I promise you that the more people earn or acquire they are no happier than any of you if they are worried that they chose the wrong roads in life.

If you find happiness on the roads you choose, whatever the sirens of the other roads tell you, you will be happier in life.

So my 8 tips for a successful career as you make choices at your crossroads. I will publish them all online so don’t worry that by the end of today you won’t remember these.

[note: a video of this speech was recorded separately after my commencement speech and I’ll publish it when it’s released]

One. Networks.

They say it’s not who you know as much as what you know. But what you know is a function of who you know. You learn so much more in life by surrounding yourself with talented people. The right company and colleagues are better than the perfect title, role

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The Truth About the Scooter Economy — An Insider’s Perspective


This post is by Mark Suster from Both Sides of the Table - Medium


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The Truth About the Scooter Economy — An Insider’s Perspective

“Bird Zero” that are custom designed by the company

There is a story arc of the electric scooter market that took the world by storm in 2018, was second-guessed late in the year and has quietly re-emerged as a powerful force of growth where few really appreciate the speed and scale of what has happened. I’d like to share some insights with you.

  • Act I was the invasion of scooters that seemed to be taking over many urban environments in 2018 and literally seemed to come out of nowhere. This led to massive funding rounds at Bird, Lime and others. It became such a quick part of popular culture that Jim Carrey rode a Bird in an opening segment of the Jimmy Kimmel show (hilarious if you haven’t seen it).
  • Act II was “revenge of the luddites” in which some local governments banned them and some annoyed citizens stole them or broke them. (luddite is literally the term for the people in England who put wrenches in the machinery in the industrial revolution and broke things to prevent progress).
  • Act III was the “I told you so” comeuppance of anybody who was sure that the electric scooter market would fail. The valuations were too high! There was seasonality, theft, tough unit economics and slowing funding rounds.

We are now in Act IV. As an insider I thought I’d offer some views of where I believe we’re at in Act IV and maybe some perspective of the future.

Invisibility & Acceptance

The adoption of Bird was so rapid in 2018 that we went from cities that one day had never seen a scooter to thousands of people riding them daily. They were new, they were strange, they were ridden mostly by young people — they were highly visible. The company started the year with no revenue and at its peak had a run rate well in excessive of $100 million / year. Pause to think about how remarkable that truly is.

The world all around us is filled with invisible things that don’t disturb us because they’ve always been there. If our streets were clear and uncrowded we might be outraged to suddenly have cars along our sidewalks, emitting carbon in our air, honking horns or crashing into pedestrians. But they’ve always been there. We’ve come to accept them as a fact of life and we let ourselves be inconvenienced by their presence and pollution without much thought. They’re invisible. They’re acceptable.

Year two in the life of electric scooters is just that — invisible. They are no longer remarkable in Santa Monica or Venice or in many cities in America, Europe or South America. As drivers we look out for them, as

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Reflections on Board Members By Some Great Ones


This post is by Brad Feld from Feld Thoughts


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I spent the past few days in Tokyo at the Kauffman Fellows Annual Summit. Over the past five years, there has been a large increase globally in the number of venture capitalists and people interested in becoming VCs. As a result, an organization like Kauffman Fellows is more important than ever as it helps build an incredible community of the next generation of VCs to learn from each other.

In the mid-1990s, I learned how to be a board member by sitting on a lot of boards, learning from other experienced board members, and making a lot of mistakes. I still make a lot of mistakes (that’s that nature of venture capital, and of life in general), but I like to believe that I’m a much more effective board member than I was 25 years ago. That said, I still have my bad days and walk out of a board

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Why You Can’t Get Serious About Productivity Unless You Optimize How Your People Use Your Space


This post is by Mark Suster from Both Sides of the Table - Medium


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I fund startups for a living and before that I ran two software startups that I founded. I’ve spent countless hours looking at historical finances, budgets, forecasts and future projections. With a standard tech startup I can tell you in my sleep that your two biggest cost items by a long shot are people (between 60–75% of total costs) and space (10–20% of total costs). The only other significant cost item that I see in some early-stage startups is inventory (for hardware or eCommerce companies).

In the earliest stages of a company a startup will often cram as many people into small rooms as is possible in order to conserve on office costs. When a company raises capital it inevitably begins to look for office space in order to increase worker productivity and happiness. Because it’s hard to predict how much space you’ll need as you expand (or, gulp, downside) startups have increasingly turned to shared spaces like WeWork, which act a bit like cloud hosting in that they allow you scale up or scale down as your business expands or slows down.

Anybody who has spent time around startups can tell you that there are bunch of productivity drains that can come from these environments:

  • Lack of meeting space for having discussions
  • Inability to concentrate due to being surrounded by “loud talkers”
  • Huge lines waiting at shared security check-ins, elevators or lunch lines

Knowing the problems of “managing people around spaces” was one of the primary reasons I backed the company Density, who built a “depth sensor” that hangs above doors and anonymously tracks spaces as seen in the GIF below.

The technology is now deployed across many clients including LinkedIn, NYU, Dropbox, Envoy and many others so we’ve learned a lot about how people use solutions like Density to increase productivity, improve physical security and better match space with people. Below are some great examples of common problems & solutions we’ve seen:

The meeting room camper / the meeting room squatter / phantom

Gartner estimates the average employee spends 27 hours/year looking for available spaces to meet — this is rarely because companies don’t have enough space. Most often, it’s because they don’t have the right mix of small / large / flex working space and as a result people tend to hog space when it is available.

Once organizations scale they inevitably implement systems to make booking shared spaces more streamlined and usually more democratic — the general procedure being that you “book a meeting room” by the hour via a scheduling system. We’ve all experienced the “squatter” who just goes into a meeting room and startups working on takes a 1–1 meeting in a room built for 12 and doesn’t bother booking it.

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One Simple Way to Eliminate Distractions in a Board Meeting


This post is by Mark Suster from Both Sides of the Table - Medium


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Photo by ROBIN WORRALL on Unsplash

Several members of your executive taken hours to prepare board materials so that you can inform your board of how things have gone since you last met 3 months ago and you have 3 hours together to make sure they have an accurate picture and to make sure you have their input into how to proceed in the months ahead. Given how seldom you come together you’d imagine you’d have the boards’ full attention during this time. Most likely you’d be wrong. You can solve this if you’re willing to.

How to Deal with Electronic Distractions

Of course the biggest competition you have with the attention of your board members is their mobile phones. Most board members don’t have the intention of checking email, reading the news or sending a quick text message but just like most smokers don’t want to pull out a cigarette — the modern executive can’t help himself or herself.

This is much easier to deal with that you would think.

  1. Announce at the start of the meeting that you’d like the board meeting to be “electronics free” including mobile phones, laptops or tablets. Have paper and pens available for notes. Be super polite and not aggressive and simply make the point that you really want the most productive time from your board members.
  2. Don’t allow your team to use laptops. I know many executives want to “stay productive” while they’re in the meeting and not being called on but if they’re not present and participating then you might as well leave them out of the room. It’s super distracting when your executives are typing away at email while the rest of the board is meant to be engaged in a discussion.
  3. Many outside lawyers like to attend board meetings. They all bring laptops and they all spend much of the time in the board meeting doing other email. Stop this. Either ask them to dial in or if they come ask them to really be present. If that’s not a good use of their time then simply ask them not to attend.
  4. Schedule a break in the meeting. If you have a 3-hour meeting put this at 1.5 hours in and have it for 15 minutes. Announce it at the start of the meeting and tell every member that this is the best time to check emails or make a short phone call but that you would really appreciate if they didn’t do it at any other time.
  5. If anybody says “I really work best when I can take electronic notes” on my (laptop, iPad, mobile phone) say, “I’m sure that’s right. But if I could ask that you please not do this for today. My

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How to Run an Effective Networking Dinner


This post is by Mark Suster from Both Sides of the Table - Medium


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Photo by Juliette F on Unsplash

Networking is a critical part of relationship building and there is no event more valuable to building relationships than the proverbial “breaking of bread” with people. I personally run many group lunches & dinners and I attend even more so I’ve developed a set of tips I often pass along in how to make these the most effective they can be.

I’m going to focus this post around the concept of a “board dinner” or “board lunch” since this is part of a series around how to more effectively run board relationships but most of these tips can be broadly applied.

This will seem very specific on how I do things. You don’t have to do them the same way but I figured if I gave you my playbook you could decide what’s comfortable for you.

Why a Board Dinner (or Lunch)?

Part of running a board is managing the board meeting itself where you share your financial and operating progress, discuss your strategy & plans going forward and get & give information to your board members. That is the basic function of a board meeting and this is often 2–4 hours depending on how early-stage or late-stage the company is.

Another part of managing relationships outside of the board construct is sending update emails and/or making regular, short calls to board members to keep them in the loop & solicit feedback as well as to create an open channel and build a relationship.

Managing a board is a bit like flying — the vast majority of time you’re at cruising altitude with the seatbelts off and there is nothing out of the ordinary. Every now and again you hit severe turbulence where people are grabbing the arm rests and panicked about what might happen next. It is at these moments that having steady neighbors around you telling you “everything will be ok” really comes into play and having a flight attendant who really knows what to do in an emergency can make a huge difference.

These existential moments come up with companies and with boards. To the extent you have warm, personal relationships between board members you often find a deep commitment to helping each other out with even the bumpiest of turbulence. Boards deal with companies that unexpectedly run out of cash, have lawsuits with customers or suppliers, fight off nasty competitors, deal with declining sales, manage founder in-fighting and so forth. Boards also deal with “good” hard problems such as “should we sell the company now” and if so should we take cash or stock.

Because getting out of the work environment helps build stronger personal rapport and because this rapport leads to more cohesive decision-making in tough times

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How to Stop Your Board Meeting from Going Down a Rat Hole


This post is by Mark Suster from Both Sides of the Table - Medium


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Photo by Filipe Delgado from Pexels

We’ve all been in meetings that get off track — sinking ever down the proverbial “rat hole,” from which rescue feels impossible. How does it happen? And how can you avoid it?

This is part of a series on Managing Boards.

In my last post I wrote about board preparation before the meeting and frankly this can be applied to any type of meeting. Put simply:

  • Define what the objective of your meeting is
  • Produce an agenda with very specific items and times associated with them
  • Produce a “pre-read” that is distributed at least 72 hours prior to the meeting (financial, strategic analysis, framing of key decisions you want made)
  • And importantly do brief “pre calls” with each board member to walk them through what you’re thinking and ask whether there is anything super critical in his or her mind that you’re not planning to cover

Good board hygiene is that you should hand out a printed agenda at every seat with times for each topic allocated. You’re allowed to deviate but if you do so make sure it’s a conscious choice.

If you do all of these things in advance you’ve already reduced the chance of going down a rat hole substantially. But it still happens. Here are the characters that take you there:

  1. “The detail merchant” — Some people are just wired to want to ask 55 questions and understand every last detail. They don’t have a strong sense of “aperture” of their responsibilities. If they thought about it they’d realize that asking 55 questions is wasting the time of every board member and they probably don’t mean to do it — it’s just in their nature. A great way to deal with the “detail merchant” is to say, “these are great questions, how about if I put in a pin in it and you and I huddle up post meeting and I can walk you through it details. These are great questions. I’m just concerned we may not get through the agenda.” Most good natured people get the super polite hint — especially if you have a reputation for actually following up.
  2. “The negative nelly” — These are people who can’t help but find fault with anything you present. You might have 5 really positive signs but his or her mind is wired to find the one thing that didn’t go well. If that thing is truly more important than others — fair enough. But if it’s just catching you out for the sake of it to make the negative nelly feel good — it’s your job as CEO to stop it.
  3. “The distracted, senior person” — We’ve all been on boards with super senior investors or executives from companies who don’t read the materials in advance or are on their phones

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How to Prepare for a Board Meeting to Make Sure you Crush It


This post is by Mark Suster from Both Sides of the Table - Medium


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Most board meetings are administrative updates that accomplish very little other than inform board members about the performance of the company since the last board meeting.

That’s certainly one function of every board but if your board is your “brain trust” and the people you can most use as a sounding board to help you make the toughest decisions in your company and if its the one group truly privy to your most confidential information and your hardest choices then it’s a shame if you don’t get more value.

Photo by Hope House Press – Leather Diary Studio on Unsplash

It’s also true that there will be tough moments in your company’s journey where you will want to be able to carry people behind the tough decisions you want. When people are problem solving WITH you they are more bought in because they’re part of the solution. If they only ever received updates then don’t expect them to be bought into tough decisions when you inevitably have the board meeting where the news isn’t positive.

If you buy into the argument that a strong board can actually help you then this post will lay out how to help you have more productive meetings by preparing properly in advance.

This is part of a broader series on Board Meetings.

How Most Board Meeting Prep Works

I’ve been sitting on tech boards for two decades so I have some experience with what goes wrong. The following is a narrative but if you have a lot of board experience I’m guessing this will sound all too familiar.

  • Board meeting gets scheduled
  • Nobody thinks too much about it until a week or two before
  • Management team has a last-minute scramble to pull materials together
  • Management is super focused on its daily work of … winning customers, signing biz dev, shipping product … so this prep is a last minute “fire drill” and is seen as a slight distraction. If polled a week before the board meeting a good number of founders would say, “I wish we could delay this meeting a couple of weeks” or “I really could do without having this board meeting at all.”
  • The board deck & financials arrive the night before the meeting. Investors who are traveling get to their hotels late at night. They decide to wake up early to read the materials. They quickly scan it before breakfast. They get reoriented with the numbers so that they aren’t caught off guard in the meeting. In town board members also only scan it because they, too, have morning meetings before the board meeting starts. Very few people turn up with a strong sense of “what we should be doing” or ready to lean into a productive

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High Functioning vs. Low Functioning Startup Boards


This post is by Mark Suster from Both Sides of the Table - Medium


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I’ve sat on many boards over the past 2 decades and seen my share of high-functioning boards and low-functioning boards. Here are some observations I have from this exposure:

If a company moves from strength-to-strength with predictable outcomes, easy financings, low staff turn-over, limited competitive threats then the composition of the board probably doesn’t matter as much. Even the best companies with the best outcomes, however, usually hit some difficult moments where a highly-functioning boards matter.

In the best cases boards come together to help the company get through its trough — in the worst cases infighting can mean an otherwise great potential business is hampered with in-fighting, misaligned incentives and drama.

This is part of a series on a Board of Directors at a Startup.

High Functioning Startup Boards

High-functioning boards have a tight-knit relationship between all members based on mutual trust and admiration. They are able to divide responsibilities and work to gain consensus on tough decisions that every startup inevitably faces.

It sounds obvious, I know. But you can’t take it for granted that your board members will naturally commit to building meaningful relationships with each other. Your role as a founder who brings on board members should be to understand the importance of the team dynamic and try to foster better human relationships so that in the future when you need people to work together for a common purpose a trust and rapport has been formed.

As an investor board member I see this as my immediate goal, too. I work hard to create working relationships with my fellow non-management board members in the same way that every investor ultimately works to develop strong working relationships with founders.

What are the kinds of difficult tasks that need to be solved by boards?

  • What should the cash burn rate of the company be and how long of a cash runway should the company maintain? (this requires a working understanding of the cashflow statements and key levers)
  • What should the compensation of key executives in the company be? (this requires a strong knowledge of market data, employee performance, company performance relative to market and available resources — cash & unallocated stock options)
  • Should we raise capital, from whom, how much and at what price?
  • Should we cut costs, do layoffs, close divisions and focus scare resources on fewer projects?
  • The founders of a company are fighting. Can we help them get along? Or is it time for one of them to go? And if so, who should leave and who should stay?

I find that some founders are insecure and hate the idea of his or her board members talking without them present. In fact, last year I was in a board meeting where we asked for time to meet and strategize

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What Makes a Great Independent Board Member?


This post is by Mark Suster from Both Sides of the Table - Medium


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When you set up a board it is often initially a combination of the founders and the early investors. It can start 2–1 founders to investors and then sometimes moves to 3–2 but sometime around the A, B or C round the idea of “independent” directors comes up.

Note: This is part of a series on Startup Boards.

This post sets out how I believe founders (and investors) should think about independent board members having worked with many of them for the past 20 years. I will also outline how to select them and incentivize them. This is really a checklist in my mind of how I think about independents.

Why Independent Directors?

There are a few reasons. As a starting point there comes a time where investors have piled millions of dollars into a company and while they don’t want to control it, they also want a degree of independence in decision-making that comes when you have somebody who wasn’t a founder that is on the board of directors.

Founders on the other hand recognize that over time they are likely not to have complete control of the board of directors of the company they founded. When an entrepreneur takes on investors who take equity (i.e. not debt where they have to be paid back) they are actually co-owners in the business you created. The board is where large equity investors get their representation. Choosing independent directors is a way that founders can create independence from investors getting to make all of the most important decisions regarding the company’s future and vice versa.

There are two other important consideration than the “neutrality” that comes with independent directors. The first is that if chosen correctly they should provide operating experience that is relevant to your business that will be represented on your board. They therefore often play the role of the “voice of the customer” and bring important relationships. The second is that they are usually very experienced operators that can mentor the founding team. This is important because when you have too many VCs on a board you only bring one kind of thinking to the board. Independents are critical to avoiding “VC group think.” Yes, this is a thing.

Local

I feel strongly that you should consider hiring an independent that is local to you. Everybody is tempted to get a “big name” and thinks that having somebody that is known is more important that somebody who actually spends time with you. Of course there is usually an inverse relationship between how senior the person is, how much time they have available and on the other side how much time they’ll spend helping you and getting involved in details. If

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How to Be a Good Board Member


This post is by Mark Suster from Both Sides of the Table - Medium


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I have been writing a series on how startup boards get selected, who sits on them and what to avoid. I will also delve into how to prepare for them, how to make the meeting effective and how to best follow up to make sure people take action.

Photo by rawpixel on Unsplash

In response to one of my posts I saw this great Tweet by Bilal Zuberi and it resonated. I started this series in part to help entrepreneurs but also to help newer investors because I’ve know with so many new companies you have so many new board members and many people are trying to figure out there respective roles.

So I thought I’d offer some high-level advice on how to be a good board member.

BEFORE THE MEETING

1. Read the materials in advance

A really large portion of directors clearly haven’t read and mentally processed the materials before the board meeting. You can hear it in the questions they ask or the lack of knowledge they have about the business. This is often management’s fault because a long-deck plus financials that arrive the night before a board meeting don’t allow for directors to properly review them. Materials should always be 72 hours in advance. But often the problem is also just that directors think they can “wing it” but skimming materials and then debating during the meeting. The best directors I know really process the information and think about the business in advance.

2. Speak with the CEO before the board meeting

I am a strong advocate for CEO’s sending materials early and scheduling calls with directors before the meeting. Some find this to be an added layer of process. I view

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Should You Allow “Board Observers” on Your Startup Board?


This post is by Mark Suster from Both Sides of the Table - Medium


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Should You Allow Board Observers on Your Startup Board?

Photo by Antenna on Unsplash

A board observer is somebody who attends your board meeting but doesn’t have a voting right. There are also certain points in a board meeting where you can ask the board observers to step out of the room unless they’ve negotiated specific rights that preclude this.

Why do board observers exist? There are actually several type and I’m going to make the case that if you can avoid board observers you generally should and when you do have them you should be thoughtful about how you manage them.

Note: This is part of a series on Startup Boards. The full lists of posts is on the link.

Types of Board Observers

1. Venture Capital “Plus 1's” — Many VC firms ask for a +1 observer and there is a reason for this. Often partners like to bring along an analyst or associate both as a way to help train younger staff (it’s an apprentice business) and also to have somebody to follow up on action items. This can be practical for both parties if this is a senior partner already sitting on 10–12 boards.

In the first instance I recommend trying to negotiate that this not be a legal right but make a verbal agreement that it isn’t a problem for you. I figure if it doesn’t need to be legal why make it so. If they insist — or even if they don’t — I like to have an agreement that the VC +1 is a “silent observer” meaning they are truly there to observe and not participate unless specifically called on by management or another board member.

This isn’t anything against the +1, in fact they often have more detailed knowledge than the partner because they’ve had more time between meetings to focus on key company details. The reason for silence is that a board meeting consists mostly of people weighing in with opinions and discussion topics. On a board with 5 members plus a CFO plus a legal representative plus 1–2 management — every voice has the ability to sway a conversation and the tenor of the meeting.

To be clear about one thing — almost nothing controversial is EVER voted on at a startup board meeting. Most votes are for administrative tasks such as stock options, 409a valuations, meeting minute approvals, compensation increases, etc. So the value of a person in the room is the value of their speaking and ability either to persuade others or to be disruptive when you’re seeking consensus.

So my golden rule is you should try to get legal or verbal agreement that board observers are silent unless called on and set the tenor as such or you’ll find that your 5-person board

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Should All of Management Attend Board Meetings?


This post is by Mark Suster from Both Sides of the Table - Medium


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Should All of Your Management Team Attend Board Meetings?

The age old question for every startup is whom to involve in the board meeting. The reality is that there are some board meetings in which having a broad set of management present is a great idea and there are some meetings where in can be a hindrance.

Photo by rawpixel on Unsplash

The goal of the best run boards ought to be to balance information dissemination with using the brain trust of the company to guide critical decisions. If you’ve taken the time to assemble important people on to your board then you ought to use the scarce time you have together to pick their brains. In a perfect world the executive team solicits input into key strategic decisions but then the executives own responsibility for the key decisions post board meeting and delivering results.

The set up of every startup board meeting is some amount of time with management updating non-executive directors, some time for the board to debate key issues, some time where there is voting and some time for non-executives. The key is figuring out how much time you have each of these functions and when. I’ve outlined the key functions in the graphic below.

Reasons to Have a Broad Group of Management Present

From a non-exec perspective there are some obvious reason board members want to hear from the heads of sales, market, product, HR, engineering, finance and support. It is definitely a good idea to have your executive team at some board meetings and for some of the time of a board meeting.

  • It is important to non-exec board members to get a feeling for each senior member of the team — how they think, how they present, what their key issues are, how the respond to tough questions. From this we develop intuition on the health of the team and the health of each function so we can act as a good long-term sounding board for the CEO and for other board members
  • It is also important the CEOs give their executives visibility. It is a chance for management teams to get to know VCs and independent board members and this should be important to CEOs to develop one’s team.
  • It is also obviously more valuable to have a functional head present when the board is debating somethings that falls within their purview.

Note: This is part of a series on Startup Boards. If you want to see the full outline please click the link.

Objectives When You Don’t Have a Broad Group of Management

There are some obvious and non-obvious reasons not to have the full executive team present during all board meetings (note the finance is usually always present).

Who Should be on Your Startup Board?


This post is by Mark Suster from Both Sides of the Table - Medium


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One of the things that founders have the most angst about is whom they should have on their board and at what stage of the business. This is smart because amazing board members can be transformative with important advice and access and can also help attract other great board members (and team members). Bad board members can make business very unpleasant.

Do you need a board when you first start you company?

If you haven’t raised any money or if you raised a small round from angels or friends & family I would suggest you avoid setting up a formal board unless the people who would join your board are deeply experienced at sitting on startup boards.

Why? Well, once people get on boards it’s pretty tough ego-wise to convince them to step off. Of course it happens all the time — especially at the earliest stages but if you can avoid it I would recommend it.

If angel investors are pressuring you to set up a board and if you don’t have the leverage to push back a little then I might suggest a 3-person board in which all 3 seats are appointed by the common stock and you agree to appoint one of these seats to the angel investor but perhaps make it either time based or event based. Time based as in “a guaranteed right for 12 months, which can be renewed by mutual board consent” and event based “a guaranteed right until the company has raised $x million from new investors.”

If it isn’t a guaranteed, permanent seat then it gives you more flexibility to deal with downstream investors when they come. If the angel board member is hugely valuable you can always keep them on the board at your discretion.

Note: This is part of a series I’m doing on “startup boards” covering topics including independent directors, board observers, how to run good board meetings, etc. The full out of Startup Boards is in this link.

Why you should set up a board at the seed round of funding

I know these days with SAFE documents and rolling convertible notes many founders prefer not to set up a board early on. I actually think having a formal board can really help you.

The functions of a board are to:

  • Periodically have to summarize how your business performed in the last period (often quarterly, in the early days sometimes it’s monthly)
  • Force you to think strategically about what you want to accomplish in the period ahead
  • Gives you a chance yourself to pull up from 1,000 feet to 20,000 feet so you can look above the clouds and think about where you’re heading. If you get a smart person on the board — just having a sparring

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Startup Boards


This post is by Mark Suster from Both Sides of the Table - Medium


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Startups that are backed by professional financial investors almost always have a Board of Directors that consists of some set of founders, investors and sometimes independent directors.

While the management of a startup company deals with the day-to-day decision-making within the company (strategy, budgets, goals, tasks, compensation) ultimately the Board of Directors has the legal governing responsibilities for these things. This is often called “corporate governance” — in case you’ve never heard that term.

It is worth pointing out that there are actually three levels of governance in venture-backed startups. What most founders think about is the daily management of their businesses and they realize that they periodically need to check in with their board of directors to get buy in for key decisions.

But there is ultimately another level of governance I might call “investor governance” in that once a board of directors has decided on an action there are times where the company still needs “shareholder consent” in order to achieve their objectives. This is often true when the action of the board could dramatically affect shareholders such as raising new capital, acquiring new businesses (that drain existing cash or dilute shareholders), selling the company or raising a lot of debt. You will often find these governing conditions in the “protective provisions” section of your company’s legal documents.

These are truly protective even though sometimes founders find them to be an unwelcome level of approval required. Without these protections there is little to stop a board, for example, from issuing new cheap stock that dilutes all of the shareholders so that certain individuals could take control of the company. Equally without protective provisions a board could vote to load the company with a ton of debt that can’t be repaid and thus diminishes the value for shareholders. Equally it could vote to increase the stock option plan to 99% of the company. These are edge cases that would be fought in court regardless but they speak to why protective provisions exist in the first place.

If you’re going to be effective as a founder you need to understand what rights and expectations you have in daily decision-making, what issues are relevant for a board to decide and what your limitations are in your legal governing documents and what votes are required to achieve big changes.

What exactly is the purpose of a Board of Directors and how do boards best function? I plan to write a series of posts on the topic. One goal I have is to help founders better figure out how to structure boards, how to communicate with boards and how to get the most out of boards. Equally, I plan to write for the benefit of investors and independents,

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The One Thing That Great Leaders Understand


This post is by Mark Suster from Both Sides of the Table - Medium


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One Thing That Great Leaders Understand

I was scanning Twitter this past week and I came across these great Tweets by Michael Seibel at Y Combinator.

These Tweets immediately resonated. In our daily jobs we spend a lot of time thinking about “management” and not enough time thinking about “leadership.” We all have shit to get done so the immediate focus often turns to the tasks at hand and how we’re going to best complete them.

In a way I think Michael’s Tweets resonated so much because they are both correct — management IS about distribution / delegation of responsibilities. But leadership is something entirely different and recognizing this is the key to a great team’s success.

I made a small chart to

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This is the Dumbest Op Ed I’ve Read in a While


This post is by Mark Suster from Both Sides of the Table - Medium


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I understand that Adam Grant is a fairly popular professor at Wharton and has a book that some people loved called “Originals” (for me it interesting but not mind blowing, and I have some first-hand knowledge of some of its inaccuracies).

Having read his latest op-ed on email I know why I erred towards the side of of not loving his book as much as some did. I think his advice is this op-ed is bananas.

Apparently he’s an “organizational psychologist professor and thinks that it’s rude not to answer email. I’m sure he’s way more versed on the research in corporate psychology than I. I also surmise that perhaps organizational psychologists don’t get as much unsolicited emails as some of us do.

Here’s a quick thought experiment for Adam since I’m assuming somebody will forward this to him and he’ll be annoyed with me. Do you think that the CEO of Google should answer every written letter he receives? Should Jeff Bezos be required to address every written complaint that shows up in Seattle or Satya Nadella at Microsoft? I don’t run one of the world’s largest companies but I can tell you for free that even I get some crazy physical mails because knowing one’s corporate address is quite easy. I have even had to get physical security advice from some of the crazy. No, it’s not fun.

Why does this happen? Being a public figure attracts attention and sometimes rational (and often irrational people) don’t have any concept for how scarce the time of a senior executive can be.

But apparently Adam thinks any email — from any person — must be returned.

Hey, Adam. Must I respond to every LinkedIn request? I get a lot of those, too. I don’t feel like canceling LinkedIn just because occasionally a well-meaning but slightly not-clued-in person from a faraway place wants me to be their personal mentor, answer 3-questions for their high-school entrepreneurship project or take a sales pitch for their recruiting services. Yes, I get completely obscure requests like these but also many rational, nice requests for which I simply don’t have the time to respond. In Adam’s world, I’m rude.

Twitter messages? Must I answer all of those? I actually prefer them because they’re only 140 chars (sometimes 280). But sometimes I get busy. I guess that’s rude.

Quora? I used to spend a bunch of time there. I guess if I don’t delete my account I’m leading people on. And it’s surprising how many people try to DM me on Instagram (I don’t care what Adam says, I’m NOT answering DMs on Insta — that’s where I go to chill out and look at photos of friends. Wow! Your kids are getting huge!). Facebook. Snapchat. Whatsapp. Signal.

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Why Has Seed Investing Declined? And What Does this Mean for the Future?


This post is by Mark Suster from Both Sides of the Table - Medium


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Seed investments are down by any measure (funds, deals, dollars) over the past 3 years in deals < $1 million AND in deals between $1–5 million. What gives?

Over the past month a colleague (Chang Xu) and I sifted through data on the venture capital industry (as we do every year) and made a bunch of calls to VCs and LPs to confirm our hypotheses. We published our initial findings in our deep dive on the VC industry in which we showed that:

  • Venture Financings for “traditional VC” is relatively flat over the past 5 years (up only 4% compounded annually)
  • The venture industry as a whole grew massively, mostly due to the IPO window for tech startups being pushed from 6–8 years a generation ago to 10–12+ years today.
  • As a result of the IPO window shifting we saw a massive inflow of public-market capital into the latest stages of venture. Round sizes of > $100 million or more now account for 47% of all VC dollars (62% if you count rounds > $50 million)
  • This has made venture capital significantly more valuable for VCs and LPs who invest in the best companies

As part of our study we noticed a trend many have spotted but few have explained — why the hell has seed financing declined so much in the past 3 years??

In this post I set out to explain why the seed market emerged as its own category in the first place and why it’s declined as of late. (if you want to download the deck it’s here on SlideShare)

Why Did The Seed Market Emerge in the First Place?

You might like to think that a bunch of savvy venture capitalists saw a market niche for raising smaller funds or perhaps there was a generational shift where disgruntled junior partners spun out of bigger firms to start their own gigs. Well, both of those things happened but they were lagging indicators.

The reality is that as a result of two major trends the costs of starting a technology startup went down massively. Between 1999–2005 the costs went down by 90% and between 2005–2010 they went down a further 90%. I launched my first startup in 1999 so I know the economics of launching from first-hand experience.

By 2005 it was significantly less expensive to launch a startup so it should be no surprise that the real innovators in the super early-stage ecosystem were all founded around this time or in the few years to come: Uncork Capital, True Ventures, First Round Capital, Baseline and then shortly thereafter Forerunner Ventures, Founder Collective, IA Ventures, Crosscut, Floodgate and so many more that I’m sure to get in trouble for not listing

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