Rev1: How do you choose board members who can help your company grow?
PG: Look for people who really believe in you as founders and in your mission. You want to be aligned from a growth standpoint. You want board members who share the same vision as the company and who are passionate about what we’re doing—someone with deep knowledge of the music space, deep knowledge of the mobile app space, and deep knowledge of social media. For us, we were lucky enough to reach out to Alex Hoffman, the former president of music.ly. It was good timing for us and good timing for him and we were able to make it work for him to come on as an independent board member.
Rev1: How do you make “the ask” for someone to join your board?
SM: Pat is always connecting with people super high-up at companies that you wouldn’t think he’d be able to connect with, and hustling that way. He came in the office and told me about Alex Hoffman, and I was like, yeah, that sounds like a perfect fit. We started building the relationship, talking about potential advisors and advisor positions. We also had a lot of operational calls with Alex, too, that dug deep in the product. At the same time that we had this open independent position and were kind of creating a list of people to fill it and working down that list, and we just ended up asking Alex. I think the initial strategic part of how we did it was deciding, okay we would love him as an adviser. Let’s just meet with him. Let’s build a relationship and see if we work together. We knew after a couple of months that it was a great fit.
Rev1: What topics can entrepreneurs discuss with their boards?
PG: For a lot of entrepreneurs, you’ve never been in a board meeting before. You haven’t had a board formally formed, so it is new for you. When you have that first board meeting there are nuances and language you use, where it’s the minutes or something else, and it feels awkward at first. You don’t know what to do or say but usually your investors will be on your board and have been in many board meetings and on many boards. They are often super helpful. It takes getting used to, but just like anything in a startup, you’re doing something you’ve never done before. It’s just another thing you add to that list.
Rev1: What does raising outside capital mean for your board of directors?
SM: A lot of times you’re just working with the investors on terms and a term sheet. You’ll figure out what the optimal board is and oftentimes it’s a negotiation of how many board seats investors get and how many board seats the founders get. In our case, we’re very happy because we both are the board; there are two board members representing the investors, and then Alex, who is an independent.
The independent is was something that we worked with the board after we formed it. We didn’t have an independent in the beginning, and a lot of times boards won’t but we worked over the past year to find the right independent. So, our board is finally complete. Building the board was just working with the investors and creating an agreement, just like the process for the actual investment and terms
Rev1: How often does your board meet?
PG: For us, it’s monthly. Some people do quarterly; some people do three times a year, whatever it may be. When you meet monthly, you don’t have as many important topics. There aren’t game-changing questions and topics you have to bring up with the board every month. It’s really about finding the flow of being most efficient with this time to get what we need and to keep the company moving forward in the best way possible. It’s determining what is most important right now and not really including any fluff. Just being very direct, very transparent. Here’s where we’re at. Here’s what we need help with, and here are some areas that we think you can help us out.
Learn more about building an effective board in Rev1’s Entrepreneur Toolkit here.