How to get started with board meetings even before series A

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This article was co-authored by Michael Blakey.

Raising funds with outside investors is an important milestone for an entrepreneur. But along with having more funds at your disposal, it also means transitioning from running your startup by yourself or with your co-founders to working with outside investors. This might also be the first time you’ll be asked to hold a board meeting.

While some argue that it’s best to hold off board meetings until series A, an active board is an integral part of running a successful organization all the way from the earlier stages. We at Cocoon Capital observed that companies with well-functioning boards scale fast and experience successful exits.

For startups considering fundraising, here are a few pointers to get you started and make the board work in your favor.

Board composition

A startup board should ideally comprise of three to five members. Smaller boards are more efficient and agile, and give members a strong sense of ownership. The number of members is usually an odd number to simplify voting outcomes. A board normally consists of at least one investor director and two founder directors, but not all founders need to be in it.

In many cases, it will be valuable to bring in at least one industry expert, as they can bring industry-specific experience and knowledge that founders and investors may not possess. They can also help out in business development and even future acquisition.

Responsibilities as a director

A director is simply responsible for acting in the best interest of all shareholders. He or she may have special rights as an investor director, but his or her responsibilities remain the same. These responsibilities include, but are not limited to:

• A duty to act honestly and in good faith
• Avoiding conflict of interest
• Exercising care, skill, and diligence
• Not misusing powers and information

All of this is described in Singapore’s Companies Act, but you can also find them in other jurisdictions.

Using the board to keep control

Founders are understandably concerned about control, as they can lose shareholder majority at a certain point in time. But until then, they deserve to have a majority of directors on the board. This does not mean, however, that a board should be seen as a vehicle to enforce majority rule by voting. In fact, in our experience, no board has ever had a formal vote as far as we can remember.

Running your first board meeting

Sending out the agenda

Board members deserve time to prepare for the meeting. The Constitution dictates that meetings should be called for with ample notice period, and that board materials should be sent out at least three days before the meeting. If you would like an agenda template, you may download a free one here.

Calling to order

Why bother?

Starting early