Archive for the ‘investors’ Category

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 …

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In response to the original post about the “Building a Board” results (see below), Tim Connors of USVP inquired about the role played by the company’s stage of development. Even though our analyses (and the original blog posting) focus on the linkage between Board characteristics and CEO characteristics, we also controlled for the impact of the company’s stage of development. (Other controls were the company’s industry segment and the time period in which the data was collected.) We used the following Company Stage controls:

• # rounds of financing
• Dollars raised in last round
• Revenues in current year
• Company age

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You’re a founder-CEO with deep technical expertise but little business experience. VCs tell you that they’ll help guide you through the treacherous business issues you’ll face as you grow your business. (In fact, you are having trouble finding any VC firms whose Web sites don’t tell you they’ll do that.) Do they, indeed, provide such mentorship when it’s needed?

In contrast to boards of directors in public companies, which play more of a monitoring role (evaluating the CEO and top management; making decisions about senior hiring, compensation/promotions, and firing; reviewing major decisions), boards in new ventures need both to monitor …

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