This is an email I posted on the newsletter for The CEO Library, as part of a Startup Founder Reading plan. Here’s the entire 16 books list
When you read about starting your own company nobody tells you anything about the board. OK, maybe someone told you, but nobody told me. So imagine my surprise when, while raising money, I needed to understand who should be on our board. Or, even more important, what the hell is the board’s purpose. And is it really, really necessary?
One of the things you really need to understand as a founder as, especially, as a CEO of a company is that the board is there to hold you accountable. By “you” I mean the CEO and the team.
Of course, that’s not the only purpose of the board. A good board provides advice, insight, ideas, and connections. It means that you need to pay attention to who is part of the board, how many people are on the board and similar things.
The book I’m recommending today, “Startup Boards” by Brad Feld and Mahendra Ramsinghani, is the best book I read on the subject. This is a primer in everything a board should be, how it should help you, as a company (and its CEO) and how it should function.
Of course, when you think of boards, you usually think of board meetings. That’s where the drama happens, where CEOs are fired (Uber, anyone?), where changes in strategy happen, where new CEOs are hired. Well, most of the board meetings are nothing like that. The book also explains what a board meeting should be like and how it should happen so that it’s not something that horrifies you every 3 months, but actually something that helps push your company forward.
You might have also heard of “advisory boards”. While not exactly necessary for a company to function, it can be a good added value if you know how to do it. Brad Feld mentions these as well and it helps.
The book is not as difficult to read as it might sound. Maybe because I was right in the middle of raising money for MavenHut, it made a lot of sense for me, so I went through it in 1-2 days. If you find that you are not interested, maybe it’s not the time for you and your company. Just know that “Startup Boards” exists so that you can come back to it when it happens.
Thanks for reading the email,
P.S.: as usual, here’s another option, in case you already read this book or it’s something that’s not interesting for you: Shoe Dog, a Memoir by the Creator of Nike, by Phil Knight. The reason I recommend this is so that you understand how relevant and important cash flow is for a company. Nike had cashflow issues long in the company’s life. Even when they were one of the biggest sport shoes companies in the world, they were still close to closing up because of an unpaid invoice.