How to get the most out of investors on your board
Maria Wagner, investment director at Beringea, explains how entrepreneurs can get the most out of the investors on their board.
Fashion icon Karl Lagerfeld once said, “I don’t do meetings. At Chanel, we do what we want, whenever we want, and it works.” But, if you are a founder or CEO of a company backed by private equity or venture capital, that line is unlikely to be acceptable to your investors. They will want to stay in touch with the business, know what’s happening and have a say in its strategic direction. If you have picked your investors well, you will actually welcome their insights and contributions to help accelerate growth. So, what’s the best way to get the most out of your investors?
Over my career as an investor, I have seen first-hand both the potential pitfalls and the substantial benefits of board meetings. Based on this, I have developed five simple steps that I advise entrepreneurs to take inside and outside the board room to maximise contributions from board members and help accelerate growth.
1. Prepare, prepare, prepare
CEOs of growing companies are always busy, so finding time to prepare for board meetings seems like a luxury. But, it is actually a necessity. They are the best opportunity you’ll get to address the biggest issues affecting your business, take advice from experts, and make key decisions that will have genuine impact – you can’t afford to let them become just a friendly catch-up.
Know what you want to get out of each meeting well ahead of time, set a clear agenda and distribute it – along with the papers – well in advance (meaning days, not hours!). This will make a big difference to how productive the meeting is.
2. Discussion over presentation
Once you have made sure board members are properly prepared for meetings, it’s crucial to make sure that the valuable time you do then have together isn’t wasted. Rather than running through presentations of hundreds of slides, start the meeting by quickly running through any key talking points, which will then create a forum for open discussion.
Always run through the challenges you’re currently facing before celebrating any successes – you want to use the expertise in the room to overcome obstacles, rather than giving yourself a pat on the back. Do not be afraid of a vigorous discussion where people may disagree – it helps to surface and resolve potential issues early. A room of yes-people is not helpful when tackling big, complex problems.
3. Participation by all
Describe to your investors and directors exactly what you want from them in terms of activity, input and ideas. Do not be afraid to be assertive.
Everyone on the board should share the same vision for growing the business, and any member who does not seem to be taking an interest or pulling their weight should be reminded of the board’s expectations. Board meetings exist to identify what needs to be done to make the business a success – everyone there should be able to make an impact, and not just be along for the ride.
4. Tap into their network
Remember that a big part of an investor’s value lies in their connections. They spend a lot of time building their networks, so take some time to work out who they might be able to introduce you to that may help you in some specific way – whether it is mentoring, hiring, or establishing connections with potential customers and partners.
5. Connect them to the business
Encourage your board members to spend time face-to-face with your senior staff or to attend some internal management meetings. Netflix famously rewrote the traditional model of keeping board members away from employee meetings, which had a hugely positive impact.
Board members will have limited first-hand experience of the inner workings of your business; by helping them to understand issues at a “boots on the ground” level, you will enable them to make much more informed recommendations. This is particularly important if the investor has expertise in a certain area, such as marketing or operations; they may find it productive to spend some time with the heads of those areas, who may also benefit from the expertise or new ideas.
Finally, while board meetings are important, it’s just as important to nurture relationships with investors one-on-one. Successful CEOs will take the time between meetings to build rapport with their investor. This is also a great opportunity to ask for feedback on how they would improve the board meetings – remember they likely sit on multiple boards and should be able to offer good advice.