As the coronavirus pandemic has disrupted the nature of businesses and the way we work, it’s making even more clear how important communication is when it comes to effective collaboration.
I’ve been reflecting on this a lot, particularly with regard to building great relationships between founders and investors, because we’ve recently closed a number of new deals and are continuing to meet new founders. As this new reality has caused me to re-evaluate my “typical” post-investment playbook, it begs the question: What does building a productive relationship post-close look like now and in more ordinary times?
I always tell founders that as a board member, my goal is to earn the right to be their first phone call in good times and especially bad, and that I also want to be able to proactively pitch both in times of crisis and when it’s business as usual. I know that there’s a fine line between an investor being helpful and being a tax, though, but this onboarding can help reduce the risk that it’s the latter. This is a two-way street, of course, but the better established this process is, the faster valuable contributions can happen.
Here’s where I’d start.
The first 30 days
Forming a new board and onboarding investors is similar to launching a team, and there’s plenty of research that shows that the way you approach this launch period is important for long-term success.
First, you’ll want to align with investors on update and sync cadence — and start implementing it. It’s a good idea to plan on regular email updates on a monthly basis leading up to the first board meeting, with the goal of getting new board member(s) up to speed so they can provide value and be helpful.
I appreciate seeing high-level metric updates as well as a few bullets on what is going well and what is not, and what is top of mind for the CEO. This might include new executives joining the ranks, new marketing activities or product planning and updates on key KPIs. For big milestones like a major launch or impactful competitive moves, or in extraordinary circumstances, like the coronavirus pandemic, it’s good hygiene to do more ad hoc updates.
As investors, we know you’re busy (and many of us have been there ourselves) — but keeping everyone on the same page as things change rapidly also allows your investors to plug in — and hopefully lighten your load.
From there, you should set the BoD meeting calendar for the rest of the year, as well as regular sync cadence between meetings. I generally have a bi-weekly, 30-minute recurring slot with my founders where there’s space to talk through whatever is top of mind for them with no pressure to prepare anything. Expect your board meetings themselves to be three-hour sessions. For most startups, these are quarterly, but you may have occasions where they are more frequent. The first board meeting should come within 90 days.
You’ll want to cap off the first 30 days with another in-person touchpoint and celebration, so you should plan your closing dinner (or, in light of COVID, a closing Zinner)! It’s a great way to keep building the relationship with new investors and continue getting to know each other outside of a formal raise process.
Within 60 days
Once you’ve gotten the major logistics out of the way in the first 30 days, it’s time to put your VCs to work for you.
One of the best pieces of advice I can offer here is to over-communicate and be explicit on where investors can help immediately. Doug Hudson, CEO at Tend, one of our portfolio companies, does an incredible job of this: His trademark style of frequent “loop” forwards with helpful commentary, often just a few words, keeps us all up to date and in sync. We find that the asynchronous connection helps us engage more deeply when we do connect live and to be more helpful across the board.
Examples of areas where you might ask for help right away include:
- Hiring needs/search kickoffs: Investors and board members can add value early on by offering insight into your hiring process, tapping their networks for referrals and providing interview guides, example job descriptions and comp metrics.
- Prospective customer intros: There are few things I enjoy more than connecting great people and businesses I believe in. Investors expect to make warm intros on behalf of their portfolio companies to help create partnerships and close deals.
- Metric walkthrough: Previewing your metrics ahead of time helps ensure that everyone is on the same page about priorities, results and where to focus the board meeting discussion. Especially for the first meeting, you don’t want your board to be seeing materials and numbers for the first time during the session.
In 90 days
The first board meeting is itself a big milestone, and it generally takes a lot of preparation to create a foundation we can build on in the future. Before you embark on this work, make sure you align on the BoD agenda ahead of time. For example, your agenda might include:
- CEO update, which includes highlights and lowlights
- Quarterly goals for the upcoming quarter, as well as progress on previous quarter’s goals
- Walkthrough of company KPIs and their trends
- One-two functional org updates (if needed)
- Review of historical financials and projections for the fiscal year
- Team updates
- Align on goals for Series B
- Key questions discussion
You’ll also want to come to the meeting with key strategic questions for the business — you’ll spend the majority of the session on those topics. Consider whether there’s one or two themes you’d like the board’s brainpower on, such as how to test GTM or thinking through pricing, product roadmaps, etc. This will also be a time when the board poses big questions to you, so you should plan on lively discussion and partnership.
Your effort to put together materials should be a cross-functional collaboration with your team. Remember that the deck just represents the culmination and recap of all the day-to-day work you’ve been putting in (and the North Star goals you’ve been working toward), so don’t sweat the materials too much. It’s the business-building you’re doing day in and day out that is what will make this meeting successful.
After the board meeting
Your first 90 days will ideally set the foundation for a rich and productive partnership between you and your investors, and the board meeting is a nice capstone. Afterward, you’ll want to follow up with any next steps and then get back into your usual cadence of communication.
The founder experience is tough, and personally I found it lonely at times.
I always found it helpful to have people I trust around the table to advise and help. Setting up the board and bringing along early investors is a great opportunity to invest in your resources and navigate challenging times like those we find ourselves in now, or even just the day to day.
