This week in The Wall Street Journal blog “The Accelerators,” Brad Feld and Steve Blank wrote articles taking opposing sides about when early stage founders should start developing their boards. Steve Blank advises against giving away board seats too early and instead concentrating on building an advisory board, which has less power and fiduciary duties. This way, the founders don’t give up too much control too quickly but still receive the benefit of professional advice from experienced people.
On the other hand, Brad Feld advises founders to start creating their boards as soon as possible. The legal responsibilities of board directors make the position more serious, strengthening their commitment to the company. He says this influence can be “transformative” in helping to build the company and raise money.
In general, I agree with Brad on this. What neither one mentioned is something that I think is critical: Board terms for at-large members at early stage companies should be one year and require unanimous approval of the other board members to renew. As Brad states, different stages require different types of board members. Typically, if the board term is not set, it is very awkward to try to remove someone who is not adding value.