Eric McDonald is DocuTAP's Founder and CEO, a Board of Directors member, and a visionary leader. Eric started developing the idea of DocuTAP in his basement in 1999. Today, he guides sales and product development, setting the vision for the software design and company's direction. DocuTAP is a proud partner to more than 800 urgent care clinics throughout the world.
Fifteen years have whizzed by. Even though my company now occupies three floors of downtown real estate, when I close my eyes I'm still working away in my basement, coding what would become DocuTAP.
With the help of friends and family, angel investors and private equity, I've raised $30 million, helping to employ 225 employees and serving roughly 1,000 urgent care clinics across the world.
While I've learned countless lessons on business strategy, I'd like to shed some light on the different investment phases I went through with my Board of Directors. When I consider the lifetime of the company, three investment phases come to mind:
The VC Stage
During the last three years, I've brought in two private equity groups to help fund DocuTAP: Bessemer Venture Partners and Bluff Point Associates. These groups have helped shape my company the most.
Here are four takeaways for board meetings with venture capitalists:
1. Surprises are a bad idea.
I quickly learned that my board members desired a complete picture before they even walked into the board room, and rarely (if ever) do they want to find something out in the actual board meeting. That means numerous preparatory phone calls to relay information, providing supplementary numbers, and emailing our deck of visuals in advance.
2. Be brief.
I believe the CEO should lead the board meetings. Considering the CEO should know exactly what's happening within their organization, he or she can cut to the chase as quickly as possible. My goal is to keep the entire board deck to as few slides as possible while providing the essential data. Too often there is a desire to detail more data than what's necessary.
3. Minimize interruptions.
I recently modified how our executives communicate at board meetings, and I feel like we've landed on a great approach. Each executive has five minutes to address the Board without interruption. Once the five minutes are up, the Board is then allowed to ask questions. This allows us to hit key points and initiate the tone of the meeting. It also allows the executive to tell the appropriate story without droning on slide after slide, hoping that the Board will listen.
4. Use data.
The data and metrics you provide a Board driven by private equity is significantly different than a Board comprised of angels or friends and family. Private equity board members are data hungry--they demand data-rich slides, and they want to know that the CEO uses data in the decision-making process, rather than going strictly by gut feel. I've long believed in making decisions with my gut, but now I have good data to back those decisions up. (Note that I didn't say you should take your gut feel out of decision-making entirely.)
Working With Angels
When I brought angel investors to the table, I quickly realized it was like attending a junior high dance. It was awkward and I was trying to figure out if they were going to let me lead without stepping on too many toes.
Here are two pieces of advice I learned during the angel investment phase:
1. Use your best judgment.
Many angel investors are individuals who have made a lot of money, but they aren't necessarily savvy at knowing how to bootstrap a startup. While they're happy to tell their stories of success, those stories don't necessarily equate to what you're doing. Just remember, they aren't you. While you're grateful for their funding, take their advice with a grain of salt.
2. Find structure.
When angel investors joined DocuTAP's Board, I quickly realized we needed structure and that I needed to figure out how to conduct a board meeting. So, I purchased the book "Robert's Rules of Order" in attempt to figure out how to properly run a board meeting. The book certainly helped guide our meetings, but I don't advise you run your board meeting based on it. Use the information that is applicable to you.
The Early Startup Phase
In the early days, my family and friends were keeping DocuTAP afloat. During that time, we wouldn't have known a Meeting Minute if it flew directly in our faces.
Here are three things I learned from the startup phase:
1. Have an agenda.
Our "board meetings" were held at the local coffee shop or at my house. They weren't scheduled months in advance, and rarely did we have an agenda.
Because "board members" were friends and family, the lines between personal and professional were often blurred. Considering my father-in-law was my first and largest investor, I had to figure out how to wear different hats. I learned to clearly communicate that I was wearing the CEO hat while discussing business expenses with him, and that I was switching hats to son-in-law while chatting about his grandkids. It's crucial to learn which hat to wear, when to wear it, when to switch hats, and to communicate which hat you are wearing.
3. Don't take it personally.
After communicating which hat I was wearing, I needed to figure out how to have specific conversations with family members and friends. I had to be particularly mindful of my father-in-law and wife, as I didn't want to hurt their feelings. When it comes to making business decisions, emotions can run really high. Try to avoid making decisions based on them.
No matter what phase of my Board metamorphosis, I have always tried to better my own personal business knowledge--whether it's improving data, figuring out how each of my executives can communicate best with the Board, or knowing which hat to wear with a specific investor. It's a process. Recognize there's a time and place for each investment phase. Enjoy the journey and take pride in the evolution.