BOD Job #3 - What are the 3 criteria for building a BOD suitable for a Startup?

After reading the article "BOD Job #1 - Why does a Startup need a BOD?" you understand why a Startup needs to build its own Board of Directors.

Then, in BOD Job #2 - What is BOD in a Startup?, it helps you understand the main functions of the board of directors, as well as the structure of a BOD.

Next, we will move on to BOD Job #3 - What are the 3 criteria for building a BOD suitable for a Startup?

Entrepreneurship is a lonely journey for founders who also serve as CEOs.

Having talented minds in the BOD team will make the entrepreneurial journey smoother.

1)A good BOD helps control the activities of the Startup effectively.

In a Startup, there are many players controlling activities.

First, the CEO and BOD:

• The CEO manages daily operations to achieve planned goals, and the BOD approves those plans.
• The CEO recruits and establishes reward and penalty mechanisms for the senior team in the Startup, and the BOD approves these mechanisms.
• The BOD can dismiss the CEO if not suitable for the Startup.

2) A good BOD needs trust, transparent decisions, and fairness.

The BOD gathers experienced members from various backgrounds, prioritizing diversity.

Common traits include the need for trust and transparency to make decisions that are fair and beneficial to shareholders.

Each BOD member has strong knowledge in a different area, complementing each other for Startup development.

Any conflicts within the BOD should be openly discussed in BOD meetings.

3) Identify good members to join the BOD.

Founders often struggle to find suitable members to join the Startup BOD.

At each stage, you will need different BOD members, gradually increasing in quantity.

A good BOD member has three characteristics:

i) Bold thinking:

Startups always tackle big problems with innovative solutions.

BOD members need fresh, bold thinking to contribute.

This fresh thinking helps the Startup surpass larger companies that appeared earlier.

ii) Entrepreneurial experience:

BOD members should have experience as startup entrepreneurs or key members of successful companies.

It is crucial for any early-stage Startup.

Entrepreneurial BOD members contribute practical experience to the CEO, having previously succeeded in real-world challenges.

BOD members who were key members of successful companies (often investors) provide an accurate perspective on what it takes for a Startup to succeed.

iii) Expertise in a field:

If a BOD member is an expert in the Startup's field, it provides a significant advantage.

Their industry knowledge and BOD relationships help the Startup grow rapidly.

Example:

My startup VuaCua is currently supported in the BOD.

The founder & CEO regularly follows my shared articles and knows that I am a startup founder with innovative development approaches for early-stage Startups (items i) and ii).

Additionally, I have experience in fundraising and working with investors (item iii).

Knowing that I am a good fit for the Startup, the founder approached and invited me to join the current BOD.

I have also supported Vua Cua significantly in redefining the business model, devising innovative approaches, and connecting with suitable partners.

Currently, Vua Cua is showing promising signs of revenue recovery.

Conclusion:

The three criteria for building a BOD suitable for a Startup are:

1. A good BOD helps control the activities of the Startup effectively.
2. A good BOD needs trust, transparent decisions, and fairness.
3. Identify good members to join the BOD.

#Fundraising #StartupFounder #BOD

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