Prepping for Your Startup’s First Board Meeting
For most of us as founders, our first formal board meeting will be for the company we founded. We don’t really bring any prior board experience or depth and training on how to “run a board meeting” with us into our startup. For some of us, we’ve done an informal dinner with your co-founder and called it a Board Meeting, but other than the sequence of drinks, appetizers, and the main course, we don’t really have a framework for running this new and looming event. Let’s take some of the mystery away and get you ready.
Board meetings aren’t dramatic or confrontational.
Your attendees are going to be your lead investors as Board Members and perhaps some Board Observers. You may also have an independent board member, and likely, your legal counsel will sit in and offer to take minutes. As the CEO, you are the main presenter but you may have your executive team present their department-level information and progress. Keep in mind, this is all about the first meeting, so if you have control issues like me, you can run through the whole meeting. It’s likely to be 60-90 minutes, depending on how much you need to cover.
You’re the Board Chair, Board Member, and CEO. Congrats! You have one more hat to wear. This means you’ll prep and run the meetings.
Board Observers are there to observe, but won’t vote on any topics. They may weigh in with their opinions on topics or their specific level of subject matter expertise. How much they weigh in really depends on how you run the meeting and how you engage them at this first meeting and what feedback you provide to them after the meeting. If they are spending too much time on a topic, provide them with that feedback after the meeting.
Attorney Support at this stage, your lawyer will likely volunteer to participate for FREE. It’s the only free work you’re likely to get, so take advantage of it. Granted they are looking for other work for their partners, and that’s part of the value they provide. You don’t have to have them attend, but if there are questions that require them to opine on a topic, make sure you prep them in advance on the topics and ask them to attend. Also, see meeting minutes below.
For future board meetings, you may also include key employees. It’s part of their development process and exposure to the board. But, for the first one, keep it simple.
Background and Context
I’ve talked to many VCs and we’ve joked about the first meeting being awkward, not because of general preparation but because we end up finding the surprises that have sprung up between the final closing of the round and the actual meeting date. Here are some examples:
- You miss your numbers
- Partnership agreement with a key strategic relationship blew up
- Key hire or co-founder issues
A good board meeting generally goes as planned (read as it can be pretty boring). A great board meeting never has surprises – but you get the valuable insight you may not have previously considered. If there is a surprise on the agenda, make sure you address it with all of the board members before the board packets are sent out or the board meeting happens.
The Board’s role is to have their nose in your business, but their fingers out of the business. What do I mean? Your Board isn’t your boss. They aren’t going to put in 16 hours a day to run the business (neither are advisors) so they are there as a resource to you. They should provide perspective or areas of input you haven’t considered. I hope they can hold a mirror up and say, “Hey, you have something green in your teeth.” And yes, they do get to vote to approve your budget and your compensation.
On the compensation topic, most of us as founders are paying ourselves below market rate if we’re paying ourselves at all (you’ll get closer to market rate with your Series A funding round). Though I don’t think your raise is a first Board meeting topic, it might need to be. This is a great example of a topic where you should have a discussion with your key board member in advance and let them represent the topic for you in the new business session.
You are setting and managing the expectations! I just did a first time board meeting this week, the CEO said she felt like she should get the Startup Board Merit Badge.
- You’re going to list a lot of things you’re thinking of doing over the upcoming quarters – excellent. Just recognize your enthusiasm could get the best of you. “Is it realistic that you’ll completed everything you have on the list in this next quarter?”
- How will you measure success? Each item should have a success measurement, it’s a number that can go into a spreadsheet and track over time, not handwavey stuff. “When we look back on this item next quarter, what will success look like?”
- What’s the timeline? “Is this item the current quarter, next quarter or next year based on current staffing, cash and workload?”
- Again, just because the board is asking for sucess measures and timelines, it’s not a request to priotize that specific item or deliver it faster.
- Be clear on your communications and ask for clarity from your Board. Please, if we ask for something ambigious, ask us what we are looking for to measure success or timeline.
- Sometimes what you thought doesn’t work out. That’s fine. Just think of reporting it out at the next meeting as “This is what we thought, this is what we learned, this is what we’re doing about it”. If it’s a major change, or strategy change. Update the board before the next board meeting.
You’ll want to sync up with all of the board attendees in advance. For this first one, you’ve got your first date; I usually plan out one year of quarterly Board meetings in advance and get them on the calendar as soon as you can. “Spontaneous Board meetings” will never happen, and shouldn’t, unless you’re selling the company or closing down.
- Coordinate dates for the first meeting in advance
- Seven days before the Board meeting, send an email overview and a link to the folder
- Send reminder email two days before, zoom link, address of the meeting, etc. Include executive admins if appropriate. Share the link to the folder again.
- Items to add to the “New Business” section of the agenda
You’ll need to get a folder of documents prepared in advance. They will include:
- Document Folder – all documents by year, by quarter. You’re in this for the long game, so create a Board Folder with all of the folders and docs.
- Financial Folder – Balance Sheet, Income Statement, usually it’s for the prior quarter (or month’s) closing financials. This means your accountant or bookkeeper has closed out the books and reconciled the bank accounts. If you don’t already have a draft budget for the year, know that project. If you don’t yet have a budget, know it’s a project that you’ll need to get to in the near future.
- Agenda (see template below). Keep it simple for now, you can always add more items/complexity. But get the first few out of the way and ask the Board what changes they would like to see in the future.
- Call to Order
- Approving Prior Meeting Minutes (in this case it’s the first meeting)
- Department level updates
- Other old business – action items from the prior meeting
- New business – new items that the board wants to discuss
- Board Presentation – Powerpoint or keynote version, usually saved as a PDF
- Supporting materials, e.g. research if you’re asking the Board to weigh in on a specific topic
- Stock Option Pricing – one thing you’ll need to prepare in advance with your corporate counsel is the Strike Price for Options. The Options will be Common vs. Preferred Shares, so should be discounted over the current price that your investor paid (this is a broader discussion around valuation and
For your department-level updates, I’d suggest that you follow the prompt: What we thought, what we learned, what we’re doing about it. This is the same prompt I use in monthly/quarterly investor updates. If you haven’t put together your quarterly objectives yet, you can find a template here for additional Board resources.
New Business – is additional items that can be added by the Board – in advance. So make sure to ask the Board if there is anything they want to add to the Agenda.
There is some formality to the meeting, but that doesn’t mean you need to take it overly seriously or go learn Roberts Rules of Order. You’re not a public company (yet). Ask for input as you go through the topics, “Is there anything you see that we haven’t considered?” “Are there additional ideas we should consider?” “Given your experience…?”
- Call the meeting to Order – note the time, and participants (and if they are virtual).
- Follow the Agenda – you’ve prepped the agenda in advance, stick to it. Set time limits, or have someone on your team manage the clock for you. You’ll find some topics that will have a meaningful discussion, and take some time, that’s awesome. But you do have an agenda you need to complete.
- Board resolutions – typically, this is the quarterly stock option grants and pricing discussion, see below.
- Executive Session – Exec Team and Board Observers leave the meeting. Only the Board members participate. In this part of the meeting, you get to have a less formal discussion with just the Board members. Board minutes are optional during this session.
What should you expect of the Board? At very least:
- Timely communications/responsiveness
- They come prepared and have pre-read all of the materials (and shaming will happen if they make a habit of not being prepared – seriously! Why are they wasting everyone’s time?).
- What specific help do you need and what does that look like?
For me, I’ve found the best way to get actionable minutes is to do a “save as” of the agenda and have a team member that is good at details convert the agenda to meeting minutes. No offense to the lawyers, but they tend to take minutes in a language that isn’t English and isn’t really actionable. This is fine at the later stages of the company when meeting minutes could be used against you in litigation. But at this early stage, it’s more important to capture key discussion topics and action items.
This way, you’ll use the minutes as a reminder of what you committed to doing before the next board meeting.
Post-Meeting Communications and Followup
Review the minutes from the meeting after you wrap up, while things are fresh in your mind, get that task completed. Send the minutes out to the group that same day with a request that they review the minutes while it’s still fresh in their mind. The next time you see the document is when you vote to approve them.
Send a reminder of the next Board meeting dates and calendar invites.
Want to know more about other board resources?