“Building a board is one of the smartest moves you can make early on. It brings structure, accountability, and support when you need it most.”
When founders think about forming a board, many regard it as something that happens after Series A funding, when venture fund managers require it. John Parker, a longtime investor in pediatric innovation and manager of both the CH Innovations Fund and newly launched Springhood Ventures, says that waiting too long to establish a Board is one of the biggest mistakes early-stage founders make.
MFN asked John to share some insights into how – and when – startups should be thinking about board governance.
Q: What are the three most important things to keep in mind when building your first board?
A: First, it’s never too early to set up your board. Strong governance is a sign of a great company. It not only helps you fundraise later but also improves your long-term planning.
Second, think about skills. A board is a low-cost way to get high-level expertise around the table. People who have had success in their career love to support founders, and to give back and get involved in something exciting and new.
Finally, focus on process and foresight. Your board should be structured for making deliberate, well-informed decisions. You’ll always be learning as you go, so surround yourself with people who can help you think beyond the next milestone. Having a board that pushes you to plan, even while knowing plans will change, is key to long-term success.
Q: For early-stage, pre-market companies, what’s the ideal board composition?
A: You can’t cover every skill area, so start with the most critical needs. Maybe it’s someone who can open fundraising doors, or someone who knows how to sell into hospitals. Identify your biggest gaps, then find board members who fill them.
More importantly, find people who ask the right questions. Look for people who can fill gaps, but only bring on people who ask good questions and practice good governance as a way to help companies and management teams. The best board meetings are full of thoughtful questions that help shape the company’s direction.
Q: Is there a structure or formula that tends to work well for early-stage, venture-backed startups?
A: I like having a board chair, ideally someone other than the start-up’s CEO. The chair should be a thought partner who talks with the CEO regularly. The chair can be an investor or not, as long as the person has agreed to put in extra time.
In terms of size, five members feels right. Three is too small; seven gets unwieldy.
As for composition, my ideal setup is:
- One management representative (usually the CEO)
- Two investors
- Two independent experts
That balance brings experience, accountability, and fresh perspective.
For very young companies, board observers can also be helpful. They don’t have voting rights, but they can bring expertise and participate in discussions.
Q: What tips do you have to ensure successful Board meetings??
A: Even though we all love Zoom, get your board together in person. Relationships deepen when people share space and possibly even a dinner. I joined a board two years ago that didn’t meet in person until recently, and that meeting completely changed the dynamic. Once board members knew each other personally, the conversations became richer and more collaborative.
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