Paul McManus of Boston Millennia Partners asked whether I have data on how board composition changes by company stage. I can slice my data using rounds of financing, company age, and a variety of other metrics. Most of those metrics tell similar stories. To pick one of them, the chart below shows board composition by company age:
Angels are consistently 6-10% of boards (an interesting pattern), the % of VCs rises relatively consistently from a high first-year base of 34%, and the % of industry execs/reps also increases consistently. As these “outsider” categories collectively increase, the % of insiders drops markedly. (Note that this leaves out “other directors” who don’t fall into these 4 categories.)
This is using the same data as I am using in the Boards paper (444 private IT companies, collected in 2000, 2001, and 2002) and in the tables below. It’s possible (and easy for me to check, using my annual-survey data since then) that boards have changed systematically since 2002; feel free to post comments on any changes you have observed since 2002.
These movements make clear sense when you think about (1) how it is that an entprepreneur might intelligently use a board in terms of such things as signalling and information acquisition (2) the demands placed upon the startup firm by those that control important resources and (3) the solution to those games in addition to Rich.vs.King.
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