Boardroom Dialogue

Jeff Bussgang's 5 reasons entrepreneurs don't like VCs

In reading Jeff Bussgang's 5 reasons entrepreneurs don't like VCs, I was reminded again of the common misunderstanding that perpetuates among entrepreneurs. They believe a board is there only to help them. It is not. It is also and essentially to monitor what is going on at the company on behalf of shareholders. Yes, value add is perhaps what the VC spent most of his/her time selling the entrepreneur on, but at the end of the day, the little time the VC has will be spent often just on the basic monitoring.

Reason number one was: "Board room M.O.:  show up late, pound on the Blackberry, look up and ask a question that was answered 2 hours ago." That is a clear sign of a sloppy, ill-prepared, over-committed board member who ideally should be replaced. Since most boards won't do that, remember for next time, entrepreneurs, to look deeply into the eyes of the prospective investor, know what their time committments and what their board habits are before you sign the deal.

As a new director

If you're joining your first board of an organization, whether public, private company or non-profit, you may be wondering about etiquette. When is it appropriate to ask a question, or make a comment and when not and how to do it? Here are a few pointers:

1. Before your first meeting you should take advantage of getting meetings with other directors and managers and ask them as many background questions as you can to get yourself up to speed. If the company or organization doesn't come with these appointments, ask for them yourself.

2. Be aware of and respect the agenda. The Chair and CEO have (hopefully) put some thought into the agenda and what needs to be covered at that meeting. Even better is an indication of the time on the agenda that the Chair expects the item to take so if it is a 10 minute item you know that you won't have the opportunity to dig into deep philosophical questions behind it. You should, however, indicate if you feel you would like to learn more about the issue off-line or if you feel that the item should be revisited at another point in time. This latter comment should then be minuted so that the board remembers to revisit it.

3.  As a wise person once said (and I'm looking up the name), feel free to disagree but don't be disagreeable. Tone and how you phrase your comments are key to keeping yourself an effective member of the board. Too many non-constructive, negative or cynical remarks can drain the board of energy to get things done. On the other hand, too many sweet positives wastes time and dangerously misleads. If you don't have anything to add that is relevant, then don't feel you need to say anything. Watch out for cultural issues too -- there will be differences across countries. For example, the Dutch are generally much more blunt than Americans from my experience.

One of those bad habits

Dear fellow board members,

How often have you had a fellow board member take a call in a board meeting? Is it just that they left their mobile phone on or do they feel that they have to handle that critical call? I suspect it is a combination of both. Yes, board meetings can go on and on, if the chairperson isn't managing it properly. But I would think that most directors have had the meeting schedule for a while in their agendas and could well last the couple of hours that the meeting lasts without taking that call. Or am I too European in my views on this? I have only served on an advisory board with a doctor, a surgeon, and he managed to not take calls.