Brad Feld and his partner Chris Wand have initiated some discussion on Board Reporting Packages. There is some good content there and I won't repeat everything here, but here are some key points about communicating with your board. Please note that every VC or investor has different expectations for what should be in a Board Reporting Package. I believe our firm sets very high standards in this area. In addition to the categories mentioned by Chris in his post, we feel that the Board Reporting Package should be in some sense a truncated Due Diligence Binder with the addition of key financials, goals, and projections. If you are keeping up to date on your Board Packages, then you will be up to date on your Due Diligence Binder, and vice versa.
The Board Reporting Package should come well in advance of the Board Meeting. It should contain everything you want to communicate to the Board and everything the Board has asked you to include and what you would expect that they might want to know. A good CEO will anticipate questions from the Board and have preparations to address them. It is a good idea when you are new to a Board that you ask each member what they want and expect from you in the meeting and in the package. Similarly, you should outline what you expect from them.
You will find that if you treat the Board as the valuable source of advising and representation that they are, they will put more effort into investing their time and energy on your behalf. Most of them will have vested financial interests in the enterprise already, but if they are on your Board then they probably have competing interests with their time. You want to do what you can to get them to go above and beyond their call of duty to help your company.
Venture-backed companies generally do a pretty good job of reporting to their boards, partly because regularly scheduled board meetings force the preparation and creation of reports. As the CEO of a venture-backed company, we spent considerable effort creating quality board reports, with input pulled from across the company. The problem is, not all companies are completely venture funded. Many are a combination of VC, angel and friends and family. Once the VC's arrive, the others are left in the dark as they no longer have enough equity in the company to qualify for board reports (and aren't on the board!). Now, as an angel investor, I have been appalled at the complete lack of transparency and reporting from the private companies I have invested in. For this reason, I was inspired to enter the world of startups again, founding Informia and delivering our first collaborative reporting solution, InvestorUpdate. www.informia.com
Posted by: Lisa | July 21, 2009 at 12:43 PM