Playing with a Board (of Directors)
When I started my company in 2006 I knew I needed a board of directors. I didn’t really know why, but a lot of smart people had given me this advice. I knew I was going to need money for the start-up as well as for growth. I also knew that I was going to need clients and vendors. I guess these are the basic building blocks of any company- money, supply, and sales venues.
So as I was searching for these three things I realized that if I was able to get these items from people that I wanted to build a stronger relationship with based on my needs that I should combine the two. What I mean is that I should have the people who supply me with money, inventory, and sales income on my board. So the search began.
I went back to a few old customers, one old employer, some friends, and some family. No one had a clue so then I looked at my current employer and the president of the company. He had plenty of money and what I was doing in my start-up was providing a service to his organization anyways. This really opened everything up. He and his VP had all the money in the world (you know what I mean) and they had a client list as long as my… arm. I still needed someone on the sales venue side. So I stayed with the same organization and found one of their auction GMs and brought him on board.
Just as it seemed that I had everything I needed one of the new board members asked me who my IT rep was going to be. I didn’t have an answer so he found me my last board member. So now there are five of us covering all of the important elements of business.
When it came time to structure the board and the company I was at first a little surprised that I wasn’t going to be the President of the company. I got a little frustrated with that as I was the one starting the company. I’ll tell you this now though it was the best move I ever made. When it comes down to it… it’s all about the money. Titles mean very little.
In order to get the brain trust that I wanted I did have to use the Donnie Deutsch approach and give each of them a piece of the company. Again I was a little turned off by this. In the first year or so of business as everything was getting started I had a lot of sleepless nights worrying about whether or not I gave up the cow to build the barn.
Now that we are almost through our second full calendar year and sales are expected to be close to $2,000,000 in 2008 and $5,000,000 in 2009 I’m extremely thankful for all that I gave up. I would never have been able to do what I did with out this board.
Here is a little piece of advice for anyone who is trying to set-up a real business. Start with your board and then look for everything else. It’s much easier to find money when you have a team of smart people standing behind you. You may even be able to raise the money you need from your board members like I did.