it was either fred wilson or brad feld who once told me/wrote/whatever that the board member represents an entity which doesn't have a specific seat at the table called 'the company'
this is true for founders as well, who because they're human, will sometimes argue for founder interests at board meetings which aren't necessarily consistent with 'the company' - you can of course always say 'well, the founders are the most important part of the company so anything they want/keeps them happy is good for the company' but you need to balance that with at the very least intellectually honest discussions about the tradeoffs
This is a really good reminder that a board member should represent all shareholders - actually even the founder in her board role.
At SignalRank we don’t take board seats as we are supplying LP like funds to early stage investors for their pro rata at B. But due to that we do have a take that can help clarify roles.
We see companies we invest into via our partners as the supply side of venture. So not customers we work for but suppliers we work with. What do they supply? Investment opportunities. That makes our care for them no less of a focus but it’s quite a nuanced difference when it comes to what our customer is.
We see our customers as our investors. In our case the people who buy our shares and finance our balance sheet. We have a fiduciary duty to them.
This makes clearer that a VC is a fiduciary of the money they manage or in our case own.
Being a board member will always force a VC to place the companies interests ahead of one’s own fiduciary role to one’s own investors.
it was either fred wilson or brad feld who once told me/wrote/whatever that the board member represents an entity which doesn't have a specific seat at the table called 'the company'
this is true for founders as well, who because they're human, will sometimes argue for founder interests at board meetings which aren't necessarily consistent with 'the company' - you can of course always say 'well, the founders are the most important part of the company so anything they want/keeps them happy is good for the company' but you need to balance that with at the very least intellectually honest discussions about the tradeoffs
Very well put- had constantly struggled with the internal conflict, feeling schizophrenic. Great to read this aloud.
Hey Kyle
This is a really good reminder that a board member should represent all shareholders - actually even the founder in her board role.
At SignalRank we don’t take board seats as we are supplying LP like funds to early stage investors for their pro rata at B. But due to that we do have a take that can help clarify roles.
We see companies we invest into via our partners as the supply side of venture. So not customers we work for but suppliers we work with. What do they supply? Investment opportunities. That makes our care for them no less of a focus but it’s quite a nuanced difference when it comes to what our customer is.
We see our customers as our investors. In our case the people who buy our shares and finance our balance sheet. We have a fiduciary duty to them.
This makes clearer that a VC is a fiduciary of the money they manage or in our case own.
Being a board member will always force a VC to place the companies interests ahead of one’s own fiduciary role to one’s own investors.
Love that you articulated this.