Creating a Buzz on Your Board of Directors
BY Ralph Ward
The young startup company may have a great idea, market potential, or hot technology, but that's often not enough to get it over the hump. A strong success buzz on the firm, which can be self-fulfilling, often depends on whom you know.
Silicon Valley tech firms can gain an enormous boost if a name lead investor or venture firm is connected with it, bringing credibility and contacts. But wise board recruitment can also give a startup this winner's sheen -- if you add a "golden director." Ed Merino, honcho at "Office of the Chairman" board recruiters and consultants in California, says that "a marquee name in the boardroom can be tremendously important, like gaining a name lead investor."
However, a high-profile name is not enough if "he doesn't have your company's best interests at heart. He has to really believe in your company and not be just a fair-weather friend." But finding such a big-name believer isn't easy for the striving startup. How can you do the mutual selling needed to land a "golden director" for your boardroom?
Work your extended network, and consider recruiting help. "Go to a recruiter with a golden Rolodex," says Merino. "They can assess both your company and potential board talent, and suggest people who could really benefit socially and financially."
Tapping a third party extends your reach, and adds a verification buffer that can make both you and the potential boardroom star more comfortable. Don't be afraid to aim high -- shoot for a director who'll elicit a "wow" from investors, clients, and job prospects.
A golden director will require some selling on your prospects. "This director will ask, 'Why do you want me? Why should I join this board?' They want to add value, but will have to believe that they really can." A star talent for your boardroom will want to be more than a name on your letterhead. "They help you solve problems, and their network becomes your network."
Don't add someone who's mercenary, but realize that "people do what they perceive to be in their own self-interest" notes Merino. "These talents don't come cheap, and they like to be compensated." Increased use of equity for director pay can make this practical for the young firm -- it increases this director's buy-in, and actually adds to his or her endorsement value with other investors.
A golden director can help lead you to platinum directors. "As an example out here [in Silicon Valley], buy.com founder Scott Blum initially made connections with [former Pepsi CEO] Donald Kendall -- who happens to be John Scully's father-in-law. That got Scully involved as a director [in July 1998], and it snowballed from there."