Startup Boards

Brad Feld and Mahendra LIVE AMA NOW

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Erik TorenbergHiring@eriktorenberg · Former Product Hunt
It is my pleasure to introduce Mahendra for an AMA today at 12PM PST. He is the author of The Business of Venture Capital and co-author of Startup Boards, recovering VC and catalyst for security startups. Ask questions in advance.... :)!
Mahendra RHunter@mahendra_gr · Author, Optimist, Security Startups
@eriktorenberg - VC rock star and co-author @bfeld is joining us today - look forward to your questions on #startupboards
Ben TossellPro@bentossell · newCo
Thanks both for doing this! Q. What’s the craziest board story you can tell us?
Brad Feld@bfeld · Managing Director, Foundry Group
@bentossell The one that sticks in my mind is a sale process with a split board. The largest investor didn't want to sell the company, even though he was making 3x on his own money and 5x on his fund investment (he'd invested separately from his fund). He was not a majority investor and was just unhappy for some reason that was indeterminate. In the midst of a call while we were negotiating the final term sheet, he suddenly yelled out "I do not support doing this deal and I no longer want to discuss it." And then he hung up the phone. The board voted unanimously (without him) to sign the LOI. We then negotiated the deal. It was a medium sized deal (> $100m exit to a public company in cash) so the bankers gave us a fairness opinion. This investor (a) wouldn't talk to anyone on the board, (b) wouldn't resign from the board, and (c) didn't respond to any emails. At the 11th hour, a long time friend called him and asked him to support the deal and he did. But it was a very long six weeks of stress.
Brad Feld@bfeld · Managing Director, Foundry Group
@bfeld @bentossell Oh - and I've had similar situations multiple times - this was the most severe.
Mahendra RHunter@mahendra_gr · Author, Optimist, Security Startups
@bentossell I am sure @bfeld has more stories that I do. One somewhat crazy board story = first time founder CEO walks into their first board meeting - no agenda or packets were sent ahead of time. The meeting starts with everyone staring at each other awkwardly around the table. The founder CEO says, "Soooooooo...what should we talk about?" Neither the board members offered, nor the CEO had asked on how to prepare for their first board meeting.
David Turner@dturneresq · RSA Fellow
What if anything is the difference between a Mentor and an Advisory Board Member? Still trying to get my head around this one!!
David Turner@dturneresq · RSA Fellow
@dturneresq I guess I am asking this more as a way to develop myself as a mentor - so I maybe it should read: What makes a good Startup Company Mentor?
Mahendra RHunter@mahendra_gr · Author, Optimist, Security Startups
@dturneresq A mentor's goal often is to work with you as an individual. This can be one-on-one and often extend beyond the company's dynamics. The Advisory Board member balances your goals with the company progress - it's a broader angle lens.
Mahendra RHunter@mahendra_gr · Author, Optimist, Security Startups
@dturneresq Being a good mentor is a life long learning process - In working with entrepreneurs, I continue to work hard to (a) listen beneath the surface (b) be a student of human behavior / motivations and (c) ask more often "How can I help?". People engage when they see you are making an honest effort - not necessarily having all the answers, but at least trying.
Emily HodginsPro@ems_hodge · Community and Marketing, Product Hunt
Thanks for joining us today! What are the biggest mistakes investors make on the board?
Brad Feld@bfeld · Managing Director, Foundry Group
@ems_hodge I'll leave that one to @mahendra_gr since he dragged me into it...
Mahendra RHunter@mahendra_gr · Author, Optimist, Security Startups
@ems_hodge - I am generalizing here. From what I have seen, some investors often do not engage meaningfully. The classic example was one board member who showed up at meetings asking "Can we start the meetings with a reminder on what the company does?' Investors make assumptions on how they can help without asking the CEO and when things dont work, they try to fire the CEO. As @pmarca recently tweeted, then you have 2 problems.
Melissa Joy KongHiring@melissajoykong · Content, Product Hunt
Hi @mahendra_gr! What are the biggest misconceptions entrepreneurs have about how to best utilize their board members?
Mahendra RHunter@mahendra_gr · Author, Optimist, Security Startups
@melissajoykong The one misconception = entrepreneurs often get into minutae of operational details. Some CEOs get too worried on expenses statements (Should I Spend X on my hotel stay? I had one CEO ask me to weigh in on their logo design and another wanted me to read their blog and edit it. This is all good but the board wants to help with (a) strategy (b) opening doors with customers and investors and (c) financing.