Techstars, Bolster, Zeck and Edward Norton Discuss Board Meetings.mp4: Video automatically transcribed by Sonix

Techstars, Bolster, Zeck and Edward Norton Discuss Board Meetings.mp4: this mp4 video file was automatically transcribed by Sonix with the best speech-to-text algorithms. This transcript may contain errors.

Edward Norton:
From Excel spreadsheets into into the Cloud or DocuSign as a platform that took legal, you know, documentation and stuff into the cloud. We with SSC were attempting to reform the board meeting, prep and board governance process in a similarly, you know, lower friction way. And we. And really it was born out of my own experiences, my own experiences serving on boards and having my own boards as a company founder and an executive and my my partners and I, who were the same team that that started Crowdrise together. We really when we were talking about it, we really thought like we're, we're tired of we're tired of our own experience and what could we do to reform it. And so that grew out of that. So this I come to the conversation about boards as a long time person, as a person serving on both nonprofit and corporate boards for over 20 years, and then and then having a few of my own boards. And so I, I've straddled, I've straddled both roles and I think there was a lot that needed to be fixed about it from both sides of the table.

Kimberly Smith:
I couldn't agree more. So one of the reasons why Matt and I bonded over multiple coffees over the last 18 months is talking about good versus bad boards, things that that's something we're both very passionate about. And so the title of this this webinar is Avoid the Curse of Bad Board Meetings, Best Practices for Running an Efficient Board. But many people, many of our early stage founders and others, even, you know, early nonprofits, don't really know how to use boards. Why do we have a board? And so I'm going to turn it over to Brad. Sorry, but you led with this, that you're on a lot of boards. And so tell me, tell the audience, why should you have a board?

Brad Feld:
Well, it varies at stage of company in terms of the, the underlying pieces below. Y But in the context of a private company, high growth startup, the mental model I like to use is that as CEO you have a team which is your leadership team. You get to have another team, which is your board. And while the board can fire you, that is one of the things the board can do to a CEO. Um, and in a lot of ways, it's the only real action that the board often will take. That's sort of independent of what's going on, although there can be others. Uh, absent that, the CEO ends up having another team of people to help her be successful. I have a simple mantra, which is as long as I support the CEO, I work for her. If I don't support the CEO, it's my job to do something about it, which is to try to get back to the place where I support her. And ultimately, again, that one tool that I have is that, you know, I can't unilaterally replace a CEO. But, you know, as a board, you know, we can we can raise those issues. So from a CEO's perspective, the value of the board is to have another team that helps her be successful. And it can be a team. It can also be individuals.

Brad Feld:
So it's important to think of them as both or sort of conceptually separate because each person on the board adds something different. But like your leadership team, it also is a functional team. The the other thing that is helpful in the context of a company at any stage, especially early, is that it's really valuable for a CEO to have someone or a set of people that she's accountable to. And it's very, very difficult as a CEO if you have no one that you're accountable to in the context of any sort of rhythm or cadence of communication, of reporting, of goal setting, you know, just roll it down the company. If if there isn't a CEO in the company, all the senior leaders don't have a set of people that account or a person that they're accountable. So it's the same kind of dynamic. The third piece, which I think, you know, as companies get bigger, becomes more formalized, but is also useful even in smaller companies and particularly useful in challenging economic environments, is that there are some governance functions that a board can serve. They don't have to be heavyweight. They don't have to be ponderous. But it does create for all shareholders some governance dynamics to have a board and have the board playing a responsible role in that context.

Kimberly Smith:
I'm going to pull on a bunch of threads there. But one of the things you said at the top was particularly and I think it's regardless of stage, but I'm going to turn this to Matt. You know. How do you feel? When you're working with boards, you're working with CEOs like. Do you feel a lot of times sometimes CEOs don't know how to work with boards and how do you reframe that narrative?

Matt Blumberg:
Yeah, that's that's a that's a really good question. I think most of them don't. And if you think about, you know, becoming a founder or a CEO for the first time, um, you know, it doesn't really come with an instruction manual. The job and uh, so, so most of what you bring to that job is something you did from your last job. And if you've never been a CEO before, one of those things that's only in the CEO's job description really is building and managing a board. Leading a board. So, um, you know, there's not necessarily a great training manual for it. That's one of the things we tried to do when we wrote startup boards. But, uh, but because there's not a lot of training for it and early startup boards tend to be like just the founders, right? Or maybe they'll stick a friend or someone they know on it. Um, it's not necessarily functioning as, as an effective or more mature board would. Um, and I would say it's also not usually one of the top five things on a founders priority list. Um, you know, they're really focused on getting product out the door, getting a early customer validation, customer adoption, raising money, kind of holding, holding the enterprise together with usually a lot of sheer force of will. So it just doesn't show up at the top of their list of like, Oh, let me be excellent at building a world class board and getting the most out of it.

Matt Blumberg:
So it's kind of some combination of those things. And yeah, mean sometimes there's fear around it. As Brad said, you know, boards can usually fire CEOs. Um, that, that sort of pushes it down the list and you know nine out of ten CEOs that I talk to when I ask them about their board, they kind of roll their eyes and, you know, they talk about, uh, you know, the board like it's some kind of, um, obligation or tax or a drag on the system. Um, and that just says to me that they haven't learned how to effectively use a board, whether it's for any of the things Brad said a minute ago or others. Um, I had, I was telling you this before we started today. I interviewed an author, a founder author for my podcast last week, and she just wrote a book about about being a being a CEO, being a founder. And she actually had had a line in there that said Boards suck and nothing You do matters. And, you know, that was just a sign to me that she actually has never like no one's ever taught her. She's never been she's never been a role model at what what a great board can do for you.

Kimberly Smith:
Edward, you talked about, obviously you're coming from a different perspective than maybe Brad, Matt and I. You had grown up in a family that had had a lot of board experience, entrepreneurial experience, nonprofit experience. You've created a few companies bid on my favorite movie, 25th hour. So you've done it all. You've seen it all from every perspective. But when you think about you put your business hat, your creative hat on. What do you think when you're sitting down in these board meetings? What should everybody be getting out of it? Yes, the Brad is like really illustrative on really supporting the CEO and making sure them and their business thrives. But let's talk about kind of just being a regular board member. What are they? What should they also it's a, you know, a give get, as they tend to say more on the non profit.

Edward Norton:
Yeah I think I think you said give get I think that. You want to have a positive reciprocal relationship like and and I think that comes with. A sense of reciprocal responsibility. Right. Backing it up a little bit. I think a lot. And this is a you know, you have a cohort with tech stars especially. You're talking about companies in the early stages. That's an opportunity to set the tone and set the characteristics, set the terms of engagement in some ways in positive ways so that a positive feedback loop builds as opposed to a negative feedback loop. And many small companies are going to be doing nothing more maybe than investor investor updates, maybe not even board presentations. But I think there's a real opportunity. At the beginning of everything. My father used to say this a lot and he was a phenomenal is a phenomenal organization builder. Whether it's donors for a nonprofit org or investors for a company, there's going to be I think a founder has to tactically, not even as an ethos, but tactically acknowledge to themselves. That the people who are supporting the enterprise, whether as a donor or an investor, are going to there, then have an almost intrinsic built in sense of desire to defend their investment. To monitor. Let's call it monitor, right. Nobody. And then and then that's sometimes where the negative thing begins. Because if a founder takes on an immediately resentful relationship of the idea of being monitored now, now you get into this whole thing of essentially the perception that whether your investors or your donors, that they're grading your homework, that they're a monitor.

Edward Norton:
And even though you know your interests are aligned, you don't feel that way. Right? So. I think I think for the heads of organizations, what you really want at the beginning is to create a sense of positive alignment. You want you need to acknowledge let me let me put it this way. I think the reciprocal responsibility, the part of it that's on the side of the founder. Is you've got to acknowledge that the sense of risk that comes with financially supporting any organization and in some ways have empathy for it. Have respect for it. Recognize that more than anything. What's desired is communication, not not performance necessarily. It's communication. It's a sense of in the donor or the or the investor, a sense of respect for the risk that they've taken with you and a desire to be communicated with. And you talk about movies and stuff like that, mostly it doesn't really relate to this kind of stuff, but in some sense it does in the sense that narrative is important. Communication is narrative, right? And so how you communicate and your willingness to communicate and a sense of, you know, quality of the communication is really important to start getting right from the get go. And that doesn't have to be about 83 page PDFs with financial reports or anything. It literally like in one of the things we encourage early companies to do is just use the platform for the quote unquote investor update, but just for communication for nothing other than communication, not even governance, even though for much bigger orgs we have a lot of of innovation around fictionalizing the governance part of the process.

Edward Norton:
I think on the on and so communication is really important. And when when founders I think, you know, brush off or get resentful or treat the idea that they have an obligation to communicate with their with their partners who have taken on some risk that that's a fail by the founder. Communication is really important. And you can get you can get what I would call proactivity. You know, you have a much better chance of building the best qualities of a board, which are force multiplication, tactical advantage that costs you nothing, you know, assistance, really proactive assistance. If you fulfill the if you fulfill the what I would call the the robust communication side of of the equation on the side of the the investor or the or the donor. My own experience, both building companies and definitely on nonprofit boards was that you started realizing that a lot of people were simply there to protect their foundations, donations or to monitor and protect. Same with investors. They're there to protect their investment. I think that's a real fail on the part of a board member. I don't think whether you've put money in in any form, if you think that you're really only there to monitor, you shouldn't be on that board.

Edward Norton:
A board should be a proactive, should be proactive, not just aligned in terms of outcomes, but should be committed to proactive engagement with and assistance of the mission of the company. And and no matter what your check size, if you don't have that commitment, if you're not willing to do more than monitor and receive report, I don't think you should be on a board. And I think that and I think board members need to clearly communicate back to management that yeah, yeah, we, we need to, but we are here to help and we are going to figure out the ways that we can be a high leverage, low cost, no cost, additional asset to the company. Just what Brad said. They are an arm of the company a front you know and and any founder who really feels that they're getting that kind of proactive assistance is going to love their board, love their board and and learn a very different set of habits which are communicating what the needs are as opposed to what the performance is, you know, and that that's how I think positive feedback, feedback loops get built. Um, but I think that and I, and I think it's important in the early stages to set the tone of those of those kinds of that kind of communicating and those kinds of like senses of reciprocal obligation. And from there a lot else can happen. But that's how I think it has to start. At the beginning.

Brad Feld:
I had one thing to that which is strong underscores on a bunch of what Edward said. Um, it is however crucial that it's a bidirectional expectation setting. So I, I. You can identify board situations where the board members want to actively engage and be helpful, and the CEO really doesn't want that. So it really needs to be both directions, which is that the CEO needs to view the board as a team and overuse that word maybe a little bit, But just to sort of make the point and and work to develop rules of engagement with that team for both the team and the CEO. An example that was very, very effective in a company of mine with an experienced CEO who had started a new company, I think, you know, was just starting to add outside board members. Company was maybe. 15 people at the time. Maybe I'd done one round of financing. The CEO wrote a 2 or 3 page document that said, Here's my expectations for the board. And then he wrote another document that said, Here's my expectations for me in the context of the board. And they were both drafts. They were not. And this is the declarative, you know, here it is. It's engraved on stone tablets. He gave it to the new the investor board members and the new outside board member and said, let's talk about this and let's adjust the expectations and make sure all of our expectations are aligned in terms of what we're doing and how we're doing it.

Brad Feld:
And that set the tone for many years for that company as it grew and as it added new board members. And yeah, it evolved a little and changed a little. And of course, you know, I'd screw up something and do something where the CEO would then hold me to account or he'd do something that would cause another board member to be frustrated with. With him, that's normal. Those are that's human dynamics on any team. But the rules of engagement created a framework where both sides, the board member and the CEO, committed to really working with each other as an effective team versus hi, here I am, I'm going to try to help. And the CEO is like, Go away, leave me alone. Or the opposite, which is the CEO is like, come on, come over here and help. And the board member is like, Well, just as long as you're making your numbers, everything's fine with me. And the second you don't make your numbers, you know you got a problem, totally useless board member because it's actually not anything to do with solving the problems.

Kimberly Smith:
Brad and Ned, were you really kind of honed in on what the key point of this whole process was? A lot of why we kind of the genesis of this meeting is a lot of times founders view the boards in an adversarial context and they view it as attacks. And you guys have really highlighted ways that we can all be strategic is board members or people that are reporting into boards. But when you think about it and I'll open it. Whoever speaks first, you know, let me answer. But how do we good structure, good governance, all of that, but how do we really help the group today? Fully understand the importance of. Not going into these meetings adversarial. And how do you. How do you talk to your CEOs, your mentoring and your. I'm sure you do a lot of it, but like, how do you make sure to initially come into these meetings and understand, hey, we're all on the same team. And Edward, you hit the nail on the head. Yes. You're going to get in situations where you have wrong board members, board members that are there for the wrong reasons. But and that's going to happen on any board. But how do you guys prep your CEOs, your mentoring to go into these well-prepared and to make sure that there's not fighting or miscommunication or not enough communication? Matt, I'll turn it to you because I know you do a bit of this.

Matt Blumberg:
Yeah, I'm happy to start with this. I mean, I think it's it's there are a few principles behind this. One is one is transparency and the other is understanding what you want to get out of the board and getting it. So, you know, on the point of transparency and someone posted this question in the Q&A like how much information should we share with the board? The answer to that question is kind of everything. And, you know, I'm a I'm a big believer in, you know, deliver deliver news early and often, whether it's good news or bad news, probably, especially if it's bad news. But, you know, in the preparation of of of materials for a board meeting, there shouldn't be anything that you're you're holding back and you should be organized enough in the way you report on the on things that have happened in the past that it's easy for a board member to read and prepare for a meeting and do their homework and kind of have the most important things called out so they don't have to hunt around for them and feel like they're looking for bad news or looking for good news. If five things went wrong last quarter, like highlight them on the pages of the income statement, the balance sheet, the KPIs, etcetera, and do callouts off to the side. You know, here's what happened here. And you know, happy to answer questions about it in the meeting.

Matt Blumberg:
So I think that's that's sort of the first thing you set yourself up for success if you if you get it all out on the table. Um, but the second thing that which is an area where I think a lot of CEOs fall down is and it sort of comes back to my other point of CEOs don't really know how to use a board. If you as a CEO, spend time reflecting with your senior leadership team or even by yourself, you know, what am I really struggling with right now? What is what are the topics that are on my mind where I could use the advice and counsel of, you know, of the of the board? And I don't mind being vulnerable. I don't mind telling them I don't have the answer to a particular question. Um, you know, or I want to hear their opinions or I want to foster a constructive debate and discussion because they're going to have different opinions about something. But it really starts with figuring out what do you hope to get out of the upcoming board meeting and then how do you structure a pre read as part of the materials that that lends itself to to that conversation? So and I'll sort of jump in and answer the question Carla just posted now because that's sort of like right on point. Yeah.

Kimberly Smith:
Is my next question for the group. So excited. Yeah. Thanks. Um.

Matt Blumberg:
So the way I think about it is when you're, when you're preparing materials for a board meeting, the weight of the materials are probably looking backwards at things that have happened in the last quarter or two since you last met. Um, so maybe 90% of the pages in a board book are report out analysis, KPIs, financials, etcetera, about about the period that you've just finished. And then a much smaller weight of the pages are devoted to teeing up forward looking strategic conversations. The stuff my board books that's called the On my Mind section. Um, and I always try in the on my mind section to have between 1 and 3 topics that it up for the board to discuss. Either I or someone on the team will write a very short memo. It's prose. It's not like slide, slide, slide, bullet, bullet, bullet. Right. It's prose. It's a memo. It tells a story. Here is topic X, Here's how I want to frame the the thing that is on my mind right now. And I'm always very clear at the end of one of those to even talk about the kind of conversation that I want to have around the topic, because a brainstorming conversation with a board, which is totally great use of a board, sometimes has a very different output than, you know, a decision or advising me on a decision or, you know, hey, I'd like to frame up two decisions. Can someone come up with an alternative? So I sort of lay out the topic as well as what kind of conversation I want the board to have.

Matt Blumberg:
The board meeting is the reverse of that. So we try to spend as little time possible talking about stuff that happened in the past. I do make sure that the senior people are in the room to talk about major events, you know, to talk about the things that are called out in the materials as things that went wrong or things to be concerned about. I've never been a believer in the dog and pony. I don't have every exact come in and do their PowerPoint or do their Google slides. Here's the State of the Union of my team because that's just stuff that can be read. So I do like to focus a short conversation in the meeting about the most important things that people need to understand about what has happened. And then I really like to devote the preponderance of the meeting to the issues, the things that are on my mind, where I've kind of teed up that conversation. I'm happy for Brad and you know, and Edward, too, to sort of jump in and critique that. But that's sort of I feel like that's the best you can do as a CEO is to is to put together a great set of materials for a board meeting that drive the conversation you want to have. It doesn't mean the meeting won't get out of control. You do have to be a skillful meeting facilitator, but you've got to put best foot forward on that.

Edward Norton:
I agree with I agree with all of that. But I'd say that there's an intrinsic piece of very significant friction in achieving it, which is the tools themselves. And this a lot of what you said is, frankly, was the is the root, the the root of why we started to try to address some of this. The the bottom line is that in everything you just described, conceptually, it's great. But the tool sets create pain. Like right now the idea of building if you start with management, prepping for a board meeting, right, the process of prepping for a board meeting and using like having your whole team go pencils down to create an 83 page PDF that you mail out to someone that has no iterative capability within it whatsoever that then they're supposed to read and then which. So you hate preparing that PDF, Everybody hates receiving that PDF and reading the PDF, but not being able to comment into it in any way or take actions that really don't need to be done in a waste of time in the board meeting, blah blah blah. Then showing up at the meeting and have the experience of the meeting be the reading of those slides, which is what happens. Everybody reads the slides out loud that they already sent. And everyone's sitting there listening, doesn't want it read to them, you know. But it's just it's just a disaster. And this is partly a function of the tools.

Edward Norton:
What we've tried to say is that at any stage, whether you have massive amounts of financial reporting, etcetera, or whether you're literally a start up company that doesn't need to do any of that. Exactly what you said. You ought to be able to deliver the highlights, the lowlights. We literally say highlights, lowlights, the actions you want people to take, all of the information is there. But and all of the necessary governance should be framed up. But in a cloud based iterative platform, what we've tried to design is to short circuit all of those pain points by basically saying this is a this is an always on iterative platform that that takes literally like a fifth of the time to rebuild. Each time you have to do it. So you want to crush down management prep time massively. You want to make it that in the pre-read the the board does have to fulfill its obligation. But really importantly, the CEO never knows who read the deck. Right. Like you get a PDF, the CEO has no idea what the board's engagement has been. And even board members who I know who sit ten board meetings a week will say that they would like the accountability that the company knows that the board members have done their work and can actually track what the board's engagement is. But the idea that lots of queries and questions and clarifications should be a part of the pre read process so that a whole lot can get washed out before you're ever sitting at the table.

Edward Norton:
Because for what you're talking about. Matt For the conversation on the day to have a quality of value and a forward looking you need to have been able to efficiently take care of the nuts and bolts and the boring shit and the queries and the questions and the clarifications so that those slides don't need to be read. They have been read, they've been queried, they've been things and where maybe even really boring time wasting stuff like approving employee stock options or minutes for God's sake. I mean, I would say in bigger companies there is sometimes a half an hour to 45 minutes per meeting spent dealing with things that could be voted in an iterative platform. Right? So which we try to design for. You want the you want the conversation on the day to be a conversation that focuses on the components of what can we do going forward that's going to be progressive and, you know, positive for the business. You want the brainstorming, you want the forward looking, you don't want the rearward looking. You want as much of the rearward to have been addressed in an iterative way prior to the meeting. And and the tools just have not existed. I mean the fact that the fact that the large majority of companies present their deck or their board book in slides is is is just a massive technological, regressive fail.

Edward Norton:
And I think that it not only really doesn't suit companies at an early stage, it really it really just a total guarantee that you're going to waste a huge amount of time. So from a toolset sense, that's what we've tried to come at, which is how do you strip away a lot of what you don't want to spend time on so that you can spend time you can build the habit of because it is a habit, by the way. That's the other thing too. A lot of these things happen by default instead of by design, and that gets back to communication as well and setting of expectations. But it's also habits. And if the company uses the tools in the right way that build the habits so that the board has the habit of knowing they should iterate on this stuff in advance of the meeting so that the meeting itself, it becomes habituated and it becomes a positive set of expectations instead of the habit of slides and reading them and wasting time and blah blah blah blah, blah. So so it takes it's sort of like building muscle. You have to actually you actually have to get into the discipline and the habit of doing things in a positive way. But our conviction was that you needed better tools, a better platform to do that on. And that's what we tried to build.

Matt Blumberg:
I just want to just pull on one thing. So I think you're right. I'm a big fan of Zack. I've been using Zack for several board meetings now, but I want to come back to something you said that that ties in something Brad said a minute ago, Edward, which is, you know, one of the ideas is to crush the amount of time that CEOs and management teams spend doing dedicated prep work for board meetings. And the phrase that Brad used a couple of minutes ago that's so important is making sure that the board is an integrated part of your operating system as a company and as a leadership team and as a CEO. And, you know, if you are spending whatever tool you use, if you are spending an inordinate amount of time doing things that are only for the purpose of reporting to the board, you're doing something wrong. And, you know, my my belief has always been that you schedule your board meetings and then you schedule your leadership team meetings and you think about when the quarter's end in such a way that you can do one set of reporting on how the quarter went. And you review it with your leadership team, you review it with your board.

Matt Blumberg:
Yeah, maybe you have to do like a tweak here or there to make it board ready, but you're not coming up with news if you're coming up with new stuff for the board. Either the board's looking at the wrong stuff or your management team is looking at the wrong stuff. So come up with one set of reporting that you can version quickly and use for everybody. And then back to Brad's point about operating rhythms and operating cadences. You know, we always do our leadership team offsite for the quarter a couple of weeks before the board meeting, and that gives our leadership team an opportunity to chew through the issues together, figure out what needs to get served up to the board. So as a CEO, I'm never sitting there saying, Oh my gosh, I have a board meeting in a few weeks. I must start preparing for it, you know? Yeah, I block out a couple hours on my calendar here and there to version things, but it's not day after day after day of pulling stuff together for individual directors or the needs of the board.

Kimberly Smith:
Edward, I am so happy you said this about sending whatever materials and making sure boards are interactive discussions and not reporting functions because maybe I'm going to sound like a monster here, but if I don't get whatever, whether it's slide decks, words, whatever it is, 48 hours before I have board meetings, I will not attend. I will cancel the meeting. I will I will not miss my time and other people's time. And I think it's really important that founders come into these meetings prepared and ready to have discussions and be able to use the board as an extension of their business. One of the things that I keep getting some questions on, and I really would love Brad, who has a lot of experience to touch on this, is. When you're talking to all of these founders, these portfolio companies are building out boards, early stage. How what advice do you give them as they're looking for board members so they can be they can be the strategic arm, that second leg of their business. How do you what advice do you give to these portfolio companies as they go through the process of building out boards?

Brad Feld:
A couple of very specific things. One, look for people who are additive to what you need. Each person should be adding different things to the board. You're going to end up with some board members because you have no choice. Investors, when they make their investment a lot of times will have an investor right to have a board seat. But even those investors have different strengths and weaknesses. So as you look to add, independent investors look for extending or adding. To the functional capabilities that people have. If you have somebody on your board or, you know, if somebody somebody on the well, if you're a CEO who is a product oriented CEO and all you have on your board are product oriented people, that's a miss. If you're a sales oriented, sales and marketing oriented CEO and you surround yourself with sales and marketing oriented people on their board that have that background, that's a miss. You want again? Additive pieces of it. Next, you want different frames of reference on your board. You said something earlier, Kim, about arguing, fighting, that sort of thing. This is a cultural norm of a company, not a cultural norm of the board. The board has to inherit the cultural norms of the company, which is actually quite hard. But some companies are very intellectual. And other companies run through conflict. I mean, I've been on the board of many companies where, you know, the board meeting is a just another extension of the management team meeting. And the management team meeting is like a big family dinner where everybody's yelling at each other and that if that's a cultural norm, that's okay. One of the challenges, I think, for a lot of CEOs and founders as they're building boards is they're afraid of stating clearly their cultural norms to the board members and recognizing that they can't control the individual behavior, but they can set a tone.

Brad Feld:
So, for example, I'll just I'll I'll use an extreme bad example in my world. Ceo who's really uncomfortable anytime they are criticized in front of a leadership team member. So you have a board meeting where you have a CEO, brings in leadership team members but is very uncomfortable and does not like when somebody on the board is critical. Of the CEO or immediately feels like they need to defend the management team member. When somebody on the board is critical of that person, the board member may be not even realizing that she's being critical. It's just their own style and their own personality. And if you say, look, we have to have a board meeting and everybody has to be friendly and everything has to be nice, and I really want your opinion, but I you know, I just don't want you to hurt anybody's feelings or I don't want you to say something like, Boy, that's a stupid idea. Um, again, that's part of that setup on the front end, right? Getting different ways that people communicate, interact is additive. Um, and then the last is I think, every CEO. Benefits from having a peer CEO on the board as an independent director. I think it's a massive, massive miss. If you're a CEO and you don't have at least one independent director who is also a CEO of another company on your board and ideally a CEO of a bigger company or maybe a CEO who's more experienced than you, but a CEO that's dealing with their own stuff so that you can actually kind of relate to their own world. Um.

Edward Norton:
I couldn't agree with that more. Brad I just like I think the and I, you know, early stage stuff, I used to think maybe that was a little premature, but like I literally just a company I've been involved with for 20 years that. Finally just went through an acquisition and everything. The Independent, you know, the couple of us were independent. The rest were essentially private equity firms that were on the thing. I can't overstate, like what value our experienced industry pro independent board member just gave our company in its year and a half long process of being put on the market and successfully getting acquired like literally none of the major equity shareholder invest. Investors on the board did one single constructive thing to assist the CEO in the process of of a very long and complicated process with bankers and everything. Our independent director literally I give him 50% of the credit for getting the deal done. Um it was it it is mid to late mid stage at least. I think that's an extremely, extremely, uh, real piece of wisdom. I think. I think independence alongside just pure investors and even to the degree that I think, look, sometimes you just can't avoid it. Sometimes people put in a certain amount of money, they lead around. They want a voting board seat. For whatever reason. I often say, Hey, look, should that be intrinsically true? They get to vote their class of shares. They get they have lots of blocking. Sometimes people have blocking rights because of the share majority that they have in a certain class of shares. Whatever My view is, is if you're just there to monitor your investment, be a board observer, you know, be an observer like that's what you're there to do.

Edward Norton:
Observe, observe. But if you're not going to help, if you're not going to accept proactive responsibility, you shouldn't be a you should be an observer. Um, and, and I've seen many, many situations where some of the big branded VCs in the world are on boards and are just not doing f all. They're like, they're just sitting there passively commenting and, you know, making their kind of pro forma observations about this and that, but nobody's doing anything. I was, I, I used to say we ran, we ran charitable crowdfunding and fund raising platforms. We had great early, you know, Fred Wilson and Bijan Sabet were on our board. And those guys, you know, they we didn't have to say they set up campaigns on the I kind of said when I went to go fund me, I was like, how can we have board members of Go fund me who who aren't setting up fundraising campaigns for the organizations they support on our own platform. It's ridiculous, right? Like, like there's just there's there's I really, I really and I and I think sometimes just I won't go on and on. But I think to echo it or underline what Brad was saying, an independent board member sometimes. Puts a light on how little others are doing. I've found independent board members are always proactive. They're more they know they're there to help, you know, and maybe they're getting a little compensation or something. It usually puts a little bit of peer pressure on on the passive ones sitting around as well. So it's it's great. I think when you horse trade around board seats because of investors try to get try to get the right to assign an independent as well.

Kimberly Smith:
So much wisdom and I'm getting all kinds of flags to wrap up, so I'm going to do my signature rapid fire question and I want everybody on. I'm going to ping everyone on the panel. What do you want this audience to leave with today? We want everyone, obviously to understand that boards are strategic, but one piece of advice that you would give your younger self for these founders that are building boards today. Matt, all you.

Matt Blumberg:
A gift, one that I haven't given yet, which is for for every I'll give you my what I call my rule of wants with boards. So add independent directors from day one. One member of the management team on the board. And for every one VC have one independent.

Kimberly Smith:
Love it, Edward.

Edward Norton:
Um, I think. We touched on it. But I think establishing establishing that positive reciprocity early as a founder. Do let your your risk capital partners know that you respect the the leap they've taken with you by by communicating recognize that communication early on will net you dividends. Um and and it's on you to establish that a good a great investor knows that themselves but ultimately it's on the founder to establish the tenor and the and the characteristic of the conversation and you can lead with with clear and regular communication to create that sense of reassurance and alignment. That's what gets the ball rolling in the positive direction for sure. Don't shine off. Don't shine off your sense of responsibility to that or treat it as a burden because done right, it will pay dividends. And then of course, talking my book again, but I hope you guys will check out what we're doing at Zach and because we're we're we're really finding that that early stage founders are saying to us this is really, really helping me build the foundational relationship that I want for a high quality relationship with the board. And and I'm punching my face, punching myself in the face over my frustration at having to do board prep much, much less. So we'd love to work with you guys.

Kimberly Smith:
I hope that was a 2020 fifth hour reference for me. Edward I'm going to take it. Brad Close, close us out on you've given so much, but give us a one more thing.

Brad Feld:
What gets said in the board meeting doesn't know that's a bad reference. Yeah, I'll build on what what Edward said because I think it's it's powerful. It's a cliche. You get out of it what you put into it. And I think a lot of entrepreneurs, a lot of founders, a lot of CEOs don't put energy into building the relationships and the team that is the board and instead the board is inflicted upon them or they they allow themselves to feel that the board is inflicted upon them. Now, just turn it around like, you know, we're all going to die, so why not put your energy into things the best you can? And even when you have conflict and controversy and disagree and you know, that's all healthy. If you're the leader of a company, invest in all of the people who are around the table. And if you've got a board, invest in those people because that will pay dividends to you. If you don't invest in those relationships, if you don't put the energy into setting expectations, if you don't try to find great people to be part of that journey with you, if you don't challenge sometimes uncomfortably, the passive participants who are just monitoring and saying, Hey, you know, this is not enough for me, I need more from you. Or if not, why don't you put somebody else in that board seat and be an observer? And by the way, if you're uncomfortable doing that, having another investor that you're more comfortable talking to, you know, enlist them to help you, like, again, put the energy into it, view it as a team that you really want to activate to help you grow and build your company.

Kimberly Smith:
Okay, we're going to end on that note, but I love it. You get what you put in. Something my momma taught me. And I think those are no truer words. Simple. It's easy, it's concise. But I really think we've broken the curse. Boards are your friend. They're your ally. Come in prepared. Be transparent and utilize your board to help you and your business grow. I, i. As you guys have heard over the last hour, I'm geeking out on board stuff. It's important to me. It's it should be important to all of you. It's obviously important to everybody on this panel. And so I want to thank everyone here. Matt, Edward, Brad, thank you for a really informative afternoon. I know we didn't get to a lot of questions and so we have more to say, but really hone in to some of the points that we have legged into today and we'll have more to follow. So thank you, everybody. Have a wonderful afternoon.

Edward Norton:
Thanks so much, everyone.

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