CHAPTER 20 Serving on the Board

“The biggest consistent irritant were coinvestors more intent on talking over management, rather than listening to them, in the board room.”

—Donald Valentine, Founder, Sequoia Capital

In a narrative account of a business, there is usually only room for one hero. When we look at the plucky start-up or entrepreneurial business venture, the company founder or CEO is deified as a visionary who forges a groundbreaking idea into reality against all odds. In this account, the CEO is described as a captain of industry, creating with mighty volition a brilliant management team that works tirelessly to craft the idea into a viable business. Cast into a secondary supporting role is the venture capitalist (VC). Despite this more marginal role, the VC's critical contributions, such as providing the capital and financing—the lifeblood of a firm—and access to a plethora of resources, from networks and contacts to mentoring and strategic guidance, can be invaluable.

Giving entrepreneurs the opportunity to cultivate an idea with the benefits of professional management and strategic guidance is a potent formula that fast-tracks ideas and products to the market. As the gatekeeper to this highly sought-after funding, a venture capitalist is someone in the business of providing financial capital and advisory assistance at every stage of development, including by serving as a board member. At the most basic level, board members are expected to adhere to duty of ...

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