As an entrepreneur, the details of corporate governance have always been a bit of a mystery to me.
But rules and process are important, all the more so since we must now report to our Series A investor, Insight Partners, through quarterly board of directors meetings.
I’ve been on a learning curve as we prepared for our first board of directors meeting, which took place recently.
Though I’d never before even attended a board of directors meeting myself, I’ve worked for startups where I watched the owners prepare for them. Those meetings always seemed to be put together in a panic.
I was determined that Knak would take a calmer approach and that getting ready for the meeting would not feel like an emergency or require frantic last-minute tasks.
Here’s how we got ready for our first board of directors meeting – and what we learned in the process.
1. We gave ourselves deadlines
To avoid a frenzy of last-minute preparation, we started by booking dates for our quarterly board meetings for the rest of the year. We know exactly when the board will meet, and we have time to prepare for each get-together.
2. We got advice in advance
Knak has a board of advisors whose role is to give us advice about issues of concern. We wanted their input on preparing our first board of directors meeting, so we called them together a few weeks in advance. The members of the board of advisors have a ton of experience, and their comments and suggestions were very helpful.
3. We asked our investors what they expected of us
We have a good working relationship with our Series A investor, Insight Partners. I’ve been transparent with them from the beginning, so I told them flat out that I had no experience with board of directors meetings. I asked them what they wanted from us and how we should prepare.
Our contact at Insight Partners was very helpful, sending us a board deck template and walking me through what numbers they wanted to see and how they wanted things formulated.
With that guidance, we were able to craft our story in a way that was useful to them.
Our contact was also reassuring, saying she knew this was our first board of directors meeting and telling us it was OK if we didn’t fill in every single one of the blanks.
That made the whole process much less intimidating.
I shared the template with our team and asked each person to fill it in as well as they could. Then we got together as a team and went through it all, first by ourselves and then with our board of advisors.
4. We learned what our investor cares about
This good piece of advice came from our board of advisors.
Our investors naturally want our company to grow, so we were told we need to highlight how we’re doing that – what steps we have put in place to ensure growth, what we see happening in the market, etc. Our growth story had been absent from the first draft of our presentation to the board; we made sure it was in the final version.
Getting the deck together was an interesting process for us. Some of the figures we were asked to provide are figures we didn’t have ready access to; it was a good exercise for us to go about getting them. Getting all of these numbers we hadn’t looked at before gave us a new perspective on how the business is doing.
5. We kept control of our story
Even though Insight Partners had sent us a template for our presentation to the board, I quickly realized that it’s all still our story. In other words, templates are not one-size-fits-all. I realized that we could – and should – add elements we think are important to us.
Part of keeping control of the story is deciding who will tell it.
While in some companies, a CEO might decide to do the entire presentation, I’m not an expert in the detailed workings of every department. So we decided to share the presentation with members of the team, speaking about areas they are responsible for.
6. We worked to build investor confidence in us
I’ve been watching two TV series about startups (Super Pumped: The Battle for Uber and WeCrashed, The Rise and Fall of WeWork) where the founders got fired from their own jobs when they lost the confidence of the board of directors. I’ve also talked to people who have met a similar fate.
That made me realize the importance of building and maintaining the investors’ confidence in us. We wanted to demonstrate at that first board of directors meeting that we remain the right people to lead Knak.
To do that, we decided first of all to take a ‘zero surprises’ approach to the meeting.
Venture capitalists don’t like getting surprises.
I know that because when pitching VCs, I would regularly ask them what the best founders did to ensure good relations. They all said that they wanted to be told right away if anything bad happened.
It’s all about trust. If you don’t share bad stuff, you undermine their confidence in you. And you forgo an opportunity to ask for help.
Leveraging expertise from our board of directors
I also decided we would be strategic about asking questions, again to bolster our funders’ confidence in us.
I was at a dinner with tech company CEOs recently, and one of them asked the group whether they brought a bunch of questions to their boards or whether they just gave them data.
That got me thinking. If we only gave the board information, we might be missing out on a chance to tap into their expertise by asking questions.
But if we turned the board of directors meeting into a big question-and-answer session, we might create the false impression that we don’t have confidence in our ability to grow the company.
So I realized I needed to make sure we had a strategic approach at the meeting. We could provide information the investors want and need without missing an opportunity to ask a pertinent question or two.
At any rate, I wasn’t anticipating having to ask too many questions.
I have a good relationship with Insight Partners. I’m in regular touch with our contact there, and when I have a question, I ask it right away. They know what’s on our minds.
One final comment about the importance of trust and confidence: Looking ahead to eventual Series B funding, we also wanted to demonstrate to Insight Partners and any other future investors that we are a worthy partner, someone who is in it for the long term. Being able to hold informative board meetings and being rigorous about corporate governance help.
7. We gave ourselves time
As I said at the beginning, my only previous experience with board of directors meetings was watching panicked preparations for them at the startups I was working at. I don’t like to rush, especially when there is no need to; I’d rather take the time to do things properly.
It took us about a month to get ready for our first board meeting – meeting with the advisory board, filling in the template, and finding the numbers we needed. It wasn’t a month of full-time work, but we did need time to pull together material.
Because we chose to take the time we needed to prepare for our first meeting, I felt no panic as that first meeting came up. I felt we had done all we could to prepare, and we were ready for it.