If you’ve listened to parts 1 and 2 of this 3-part podcast series (which originally aired on YouTube), you learned whether venture capital is the best source of funding for your startup, and you’ve successfully negotiated a term sheet and put money in your bank account. Congratulations!
Now it’s time to get the most of your venture investor (who will likely take a board set) and the rest of your board over the life of your company. (Sobering and perhaps terrifying statistic: the relationship you build with your venture investor is now on average longer than the length of a typical marriage in the United States.)
In this episode, a16z Managing Partner Scott Kupor shares practices for working with your board over time as it grows from just you, your co-founders and first investor all the way through the time when you are recruiting independent board members in preparation for going public.
Scott answers a16z Deal and Research Partner Frank Chen’s questions about the lifecycle of your board:
- What do you want from a board?
- How much should you share with your board, given that the board might have the power to remove you as the CEO?
- How do you handle situations in which the economic interests of your board members diverge?
- When should you start recruiting an independent board member? What should you look for?
- What is a “management carveout” and should you get one?
- How do you negotiate three different scenarios: a tough “down round” or wind down, a successful acquisition by a bigger company, and (most fun!) an IPO? What do you want from your board in each of these situations?
- What do you need to understand about the incentives of your investment banker who is taking you public?
- What are Scott’s key takeaways from his book about raising money from venture capitalists?
Want to learn more? Read Scott’s book Secrets of Sand Hill Road: Venture Capital and How to Get It.
- Part 1: How to Understand and Choose a Venture Investor
- Part 2: How to Raise Money from a Venture Investor
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