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I remember my first board meeting. I was a summer intern at a fast-growing tech company, and the founder wanted to give the summer interns the opportunity to experience a board meeting first hand. That formative experience was a huge benefit to me when later on I started my first company. I already had a rough inkling of what’s involved in a typical board meeting. Most first-time founders aren’t so lucky and go into their first board meeting a bit blind.
Having to deal with board meetings is a good sign, as it usually means you’ve managed to raise some institutional money. Having professional investors on your cap table comes with having to run professional board meetings. I’ll do my best to outline what’s involved and what to expect here.
A board meeting is exactly what it sounds like: a meeting of the members of the board of directors. Beyond board members, the executive team of the company is also typically invited to the meetings to present to the board, especially the CFO. As well, investors on the board will often bring along an analyst or associate as an observer.
Most companies call board meetings every three months. They typically last two to three hours.
For your board to come prepared and be efficient at the meeting, it’s critical that the management team prepare pre-read material. The pre-read material should ideally go out a week before the board meeting and certainly no later than half a week prior.
The main document of a board package is the board presentation. It typically contains all the relevant information and will be used as a support for the actual board meeting. Other documents in the package are the quarterly/annual financial statements, pro-forma models, minutes from committee meetings and the prior board meetings and any other supporting documents the management team might deem necessary.
Level of detail
As you prepare the board presentations, recall that directors work with the company but not within the company. Internal company jargon will mostly be meaningless to your external board members. Do not use any unexplained abbreviation or technical jargon in your presentation.
Information used should be meaningful: when presenting data, always answer the question: “What does it mean?”. Every piece of data given should serve a purpose. Trim unnecessary details. The board needs differ from the management ones, so the presentation should be focused on the information the board needs to make decisions.
Finding the right balance of detail is always tricky. It’s advisable to err on the side of too much detail vs. too little. Your board members will likely give you feedback after each meeting. Over time you should be able to calibrate to your board members desired level of detail.
It’s crucial the board presentation covers the breadth of the company’s activities and efficiently communicates these activities to the board. From my own experience the following is a good starting point to prepare an initial board deck:
Overall business update
Business development update
Asks: What does management need from the board
Optional and/or appendix
Approval of options grants
Approval of adjournment
Having the content right is one step closer to a good board meeting. But to make it great, here are a few more general tips:
You’re ready now to prepare for your first board meeting!
Christian’s commentary on pre-read material is a really important one that deserves extra emphasis.
A week in advance can seem like overkill. You’re probably wondering, “Can’t my investors just read the package on the plane or over breakfast the morning of the meeting?” No. Board meetings are a blend of tactical and strategic discussions, and you should be aiming to maximize time spent on strategic topics as much as possible.
Yes, you need to approve option grants, and provide an updated cash balance; these topics won’t take much time in the meeting nor will your investors linger on these points during their pre-read.
But most of the board meeting will be spent on meaty topics: your mission, the hard trade-offs in spending you’re planning to make, the challenges facing your company, if those challenges overcome by more marketing spend, a more experienced executive in that job function, or a true pivot away from that strategy. These conversation topics take time for your board to absorb, and the best guidance comes when there’s time for your proposals to percolate in your investors’ minds. If you deny them time to review the deck, you’re denying yourself their best advice.
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