360. Stories, Advice, and Leveraging 35 Years of Startup Board Experience (Brad Feld)

360. Stories, Advice, and Leveraging 35 Years of Startup Board Experience (Brad Feld)


Brad Feld of Foundry Group and Techstars joins Nate to discuss Stories, Advice, and Leveraging 35 Years of Startup Board Experience. In this episode we cover:

  • How to Build and Leverage a Board from the Beginning
  • Advice for Board Members
  • Avoiding the Most-Common Mistakes
  • And more!

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Transcribed with AI:

0:00
Brad, thanks so much for joining us today. I’ve been looking forward to this since my 100 made the intro and I’m glad that we’re able to find a time.
0:07
My pleasure to be here.
0:09
Can you give us a two to three minute background of yourself and your path to venture?
0:14
Sure. I’m a partner at a venture fund called Foundry. We are six partners, we’ve got about $4 billion under management, we invest 75% of our money directly in early stage companies, typically at the Series A, that 25% of our capital, we invest in early stage venture funds. As an LP, we have about just a little bit under 50 that we’re investors in that we essentially have partnerships with. I’m also co founder of TechStars, which I’m on the board of and Foundry and my partners are very involved in lots of different ways. And we’ve got a lot of capital allocated to different aspects of the TechStars funds. I started a company while I was in college, I sold it seven years later to a public company never raised any outside capital. That company was very acquisitive. So I was on their deal team and learned how to do acquisitions by basically just being involved. I also had never made any investments. So I took most of the money that I made from selling that first company. And between 1994 and 96 made 40 angel investments usually 25 $50,000 checks, and then sort of accidentally became a VC in 1996 1997.
1:34
How accidentally, how does one accidentally become a VC?
1:37
Extremely accidentally. So I was I was making angel investments with my own money. It was the rise of the commercial internet. I was living in Boston, which is where my first company was. I had made investments in a handful of reasonably high profile, or had become quickly high profile, you know, new internet companies on both the east coast and the west coast because I traveled a lot. And my wife Amy and I moved to Colorado randomly, we just decided we were going to try boulder. And if we liked it, we’d stay in if we didn’t, we’d go try something else. We’d love boulder. And that’s where we stayed. I knew a VC in Boston, who had been involved in or was involved in this Japanese company called soft bank that at the time, nobody knew anything about had just started to buy companies in the US and was starting to invest money in this thing that was called digital media which became the internet. And through him got connected into SoftBank. And with sort of a small group couple of people that Softbank hired. And then a couple of affiliates of SoftBank, which included a couple of people that are really well known Fred Wilson. Now partner USV and Jerry colonna, who runs a firm called a reboot. And then a fourth guy rich leavened off whose longtime friend, the four of us were affiliates. So we basically got to continue to do our own investing. But we brought deals to SoftBank. In 1997, maybe or early 97, Softbank effectively ran out of money. And when that happened, a group of the four of us, me and three of the Softbank people, started a firm that initially was called Softbank Technology Ventures and Softbank sponsored, had a long, twisty road and eventually became called Mobius venture capital. And while Softbank was our sponsor, we were the we own the firm. So it was really our firm. And I woke up one day and I was, you know, partners with these three other guys doing venture, which was not the plan.
3:56
That’s awesome. Okay, well, I everyone knows that you’re a prolific blogger, I’ve I’ve read countless of your posts, and you have a number of podcast episodes out there about your background, your investing principles. So we’re not going to do that. Today, we’re going to talk about we’re gonna talk about the recent book. And I’m going to try to make the conversation about the book also not boring, because I know you’ve had a couple podcasts on the book as well. We’re gonna have to cover some of the basics, but my hope is that we’re going to cover some of the areas you haven’t touched on yet, too. So for those that haven’t read Startup Boards, the second edition, which recently came out, can you describe to the audience what the book is about what the inspiration was behind writing it?
4:46
Sure. The book is about how boards board of directors work in the context of startups, so not aimed at public company boards and big boards, but for startups and how a board can be helpful to a startup or hurtful to a startup, how to think about roles of board members, the dynamics of sort of the functional interaction between and amongst the team that is the board of, you know, formal and informal responsibilities. And then a lot of stuff about building a board, how to think about the board from a CEOs perspective. And then the other side of it if you’re interested in becoming a board member, or you aspire to be a board member, how that works, and you know how to end up on a board. And if you are a board member, what you should or shouldn’t be doing. The inspiration for it was, the first edition came out in 2013. I’ve been writing at that point, a couple of books that were startup related. I’ve written a book called startup communities, which had the hypothesis that you can build a need to build a startup community, basically in every major city in the world, and that entrepreneurship would be democratized globally. I wrote a book with my wife, Amy Batchelor called Startup life, which was I think that title subtitle was Surviving and Thriving in a relationship with an entrepreneur. So sort of how to think about it some autobiographical, but a lot, just sort of general principles that we tried to live our life, sort of in this entrepreneurial world that I was in with her as my partner, who also has her own work world, in addition to my work world, and sort of how we played that out. And a logical book, in the context of that series was around boards, which I felt, even in 2013, I’ve been on a handful of boards that were extraordinary. I’ve been on a handful of boards that were awful. The vast majority of boards I’ve been on, I’ve been somewhere and the average, mediocre, okay, sometimes individual board members are extraordinary. But the collective team, that’s the board occasionally is extraordinary, but most of the time is not. And I felt like there was an enormous amount of both misinformation and misunderstanding, and a real lack of opportunity or opportunity missed by entrepreneurs in building effective boards and using the board to help you build and scale your Kemp, your build and scale your company.
7:22
It’s one of the most comprehensive books I’ve read about boards for sure. So if you’re a founder investor, highly recommend reading it. You cover a variety of important topics in the book, is there an overarching takeaway that you want the reader to have?
7:38
Yeah, I think we, we use a quote from Jeff Lawson. Early that I, I feel really kind of says it all. And then if anybody’s heard a podcast of me talking about it before I generally bring it up, because it’s just so well said, Jeff is the founder of Twilio, co founder of Twilio. And he’s the CEO. Twilio, I don’t know what their market cap is now. But let’s say it’s 15 $20 billion market cap and a very successful company. And Jeff’s simple view was, I get to build to a CEO, I get to build two boards. One board is my leadership team. And one board, sorry, I get to build two teams. One team is my leadership team. And one team is my board of directors. In the context of my leadership team, that’s pretty well understood how to build and lead a leadership team as a CEO. But what he what Jeff says is so powerful, he says, Look, I know the board can fire me, that’s one of the responsibilities of a board. But as long as the board doesn’t fire me, why not try to build the most highly effective team of really experienced people who are my board of directors to help me build and scale my business. And you know that that’s the essence of it. It’s like, you know, lots of entrepreneurs are afraid of the board, or they have mythology about how the board is fire CEOs or boards are useless, or it’s so time consuming waste of energy. And, by the way, there are plenty of boards that are so it’s, it’s not that the there’s a mythology, That’s complete nonsense. But a lot of the functional activity, and a lot of that tone of how effective aboard is has a lot to do with the CEO and with the founders and how they build and engage with this thing called the board of directors. And so trying to help people get a full view of that and have a lot of tools for thinking about it. From the perspective of Founder CEO was was a key goal.
9:35
I want to talk about building that board in maybe let’s start at the very beginning. So from the founding of a company, every startup has a board, even if it’s just one person. How do you advise founders first on the right time to grow their board beyond just himself and hold regular board meetings with some sort of formality?
9:55
Yeah, Matt Blumberg, who’s the third co-author of the book and was co-author in the second edition, Amanda and I wrote the first edition, Matt added on for the third of the second edition has something which I really like, which is is is rule of one, a rule of wands. And in it, he says you should build a board from day one, you should only have one founder on the board. And every time you add an investor to the board, you should add an independent director to the board. And I don’t agree as strongly with him that you should only have one founder on the board, especially for very, very early stage companies. But as the business evolves and grows, I do agree with that, that premise that having multiple founders on the boards is challenging. And frankly, there’s lots of ways to address that and still have the various founders have a voice without necessarily being on the board. But it comes back to the answer to your question, which is, I think, I think you should build your board from the very beginning. And take advantage of the fact that you’re going to have again, same thing, you know, that Jeff said, you have these incredibly capable people that you attract, to help you build your company and help you as a leader grow and develop. Why not take advantage of that. And the discipline of having a board and having a regular cadence for board meetings, of having accountability as a founder and as a CEO, to an entity, the board that forces a level of seriousness and rigor, especially early on, especially with regard to issues that you may or may not know what to do with, you know, whether you’re a first time entrepreneur, CEO or multi time entrepreneur CEO, the board can be really helpful for that. So I encourage entrepreneurs to build their boards from the very beginning, there is a lot of surgeons in the market today. And there’s been a lot of view by many that not only do you not need to build a board early, but you should delay building a board as long as you possibly can. And I think that advice is from my frame of reference, ill informed but it comes from the perspective of founders, and also some investors who many of them used to be founders, who experienced very bad boards are had very ineffective boards that was sort of not helpful to them in their own growth and development. So I think one of the things to think about in the context of the answer of when you should build your board as an entrepreneur is what is your goal? What are you trying to accomplish? And in some ways, really look at the things that would cause you not to build a board early on. Logical ones are why don’t want to lose control of my company. I don’t want somebody to tell me what to do. I don’t want to have to answer to anyone, right? Like those are easy, there’s probably you know, 50, more you could come up with, and sort of try to understand what those are. And then think about whether they’re actually helpful to you as an entrepreneur and helpful to you and your company. Or whether you’re reacting or responding to something else, whether it’s a fear that you have something that you heard about happened to somebody else, conventional wisdom, which might or might not be correct, that you just hear floating around. And so sort of, again, going back to, you know, the basics of saying, you know, what’s your goal here? And if, if the goal of the board is to have another highly functional team, and helps you build your business? Well, that’s responsibility that you as the CEO, need to take on, or have the opportunity to take on it you decide not to. But if you decide to take it on, you should take it on seriously.
13:44
So aside from not building a board, and keeping it just the founder, what is the biggest mistake that a founder does make when they’re forming their first board, call it sub series A when they’re, they’re in the infancy of the company? What are some of the common mistakes that you would tell founders to look out for?
13:59
Yeah there’s, there’s a simple quick hit list. One is you just put all your co-founders on the board. So the board is just the same group of people sitting around co-founding the company. The next is you view the board as a control mechanism for the business. And so you try to control the board through, you know, who’s on it, number of board seats. I think there’s a lot of anthropomorphizing of boards and boards a team. It’s not an individual thing called the board. And yeah, it has a function and has formal legal responsibilities. But it’s a collection of individuals functioning as a team, I think a very common mistake is not to look at as a team and just look at it as a collection of individuals or going to anthropomorphize it into an entity, which it’s not. Another is to not be thoughtful about board construction. This is a different flavor of just adding all the founders to the board but you know, adding your friends or adding somebody that you know or not being really thoughtful about who are the two or three or four people I want to add to the mix here. or, at this stage of the game, those are some quick, easy, common mistakes.
15:04
And I think most founders are probably, you know, somewhere in between their board being very effective. And it being, you know, horribly ineffective, right? There’s somewhere in between, they might have some fear of the of their board. And you noted this, but CEOs spend so much time developing their management team, but they don’t do the same with their board. They don’t there’s almost like a misalignment or there’s a mis categorization, if you will. What steps do you recommend founders to take to take the current state of that board to get more aligned and start treating them like a team get them all rowing in the same direction rather than this veneer between the two?
15:46
I think, you know, if you have a board already, it’s set expectations around what you want from the board. Be clear about how you want the board to interact with you and with the leadership team, not by dictating, here’s what I want you to do, but by forming, you know, a consensus agreement discussing it. If you have a lead director, or a chair, or a particularly, you know, significant board member who has a lot of impact on you know, what’s going on, work with that person to define effective rules of engagement for the whole team, that’s the board. You know, the all the same socialization activities that you do with the leadership team, especially, you know, in, in today’s post COVID world with the world of remote work or hybrid work, like understanding how to do things to build relationships between the participants, so that there’s a really a functional intersection of activity between everyone being clear about what you want the characteristics of board members to be. And if you find yourself with a board that doesn’t have, you know, different characteristics represented, putting some effort into changing, you know, the membership or the participation on the board to incorporate those characteristics, regardless of what they are. So, you know, a series of things that, that you need to work through. I mean, I feel like it’s kind of generic, what I’m saying it’s, you know, build a team, like, do, do the stuff that you have to do, whether you’re, whatever kind of team you’re building, anyone who’s ever been a leader knows that if you just have a collection of people, and you spend no time working on the team dynamics of that team, and building the relationships, setting expectations, you’re gonna have a shitty team, it’s not going to be terribly effective, you might have some superstars, but you’re not going to have a thing that works well together.
17:52
Yeah, it’s definitely what you what you’re putting in is what you’re gonna get out of it. Right? Like, if you’re dedicating no time, no attention or effort into developing cultivating those relationships, and conveying expectations, you’re, you’re gonna get very little out of it if you’re a founder. Right? How do you define a highly functioning board, though? I mean, you alluded to this earlier, but I mean, you’ve probably been on what 200? Boards? Ish, somewhere in that range?
18:18
I don’t know the number. It’s a big number.
18:20
it’s a big number. For the boards, we’ve seen run the most effectively, though, what are, what are the characteristics of a high functioning board?
18:29
The I mean, the moments in time that the board actually makes a difference is when a company is in distress. When there’s transactional activity happening, whether there’s when there’s exogenous things going on, that could potentially really impact the company positively or negative. And when there’s leadership transitions, so it’s probably a couple of other, you know, bullet points that you could put in that mix. But you know, those kinds of moments. So the much of the rest of the time that the board is interacting, it’s preparing itself, to be effective in a moment like that. As an individual board member, I have a mantra, which is, as long as I support the CEO, my job is to do whatever I can do to help her be successful. If I get to a place where I don’t support her, it’s my job to do something about it, which doesn’t mean fire her but try to get back to a place where I support her. And ultimately, if I can’t get back to the place as a board member, I am part of an organization, the board that can replace and recruit a new CEO. So I can always choose to go down that path if I want to, although not 100% of time, because there’s definitely situations where companies are configured in a way where the board actually can’t replace the CEO. And that’s, that’s, that’s notable. It’s, it’s the rare exception, but it exists. But if I use that frame of reference for me, individually, every board member that I every see I’ve ever worked with needs different stuff. And as a result, every board that I’ve ever worked with needs to operate in different ways depending on what the CEO needs and what the context is. And I think the really well functioning boards have awareness of that. And when they really need to engage around an issue, whether it’s a negative or a positive, but that’s one that goes beyond just what the CEO can do. The highly functional boards work really well to get to an answer and an outcome. And the ones that are not there tends to be a lot of thrash, a lot of conflict, a lot of second guessing, a lot of undermining. By the way highly functioning boards have lots of debate, plenty of arguments, lots of disagreement. But ultimately, it’s in the search of an answer, it’s in the search of a decision. Whereas organizations that are not functional, or, you know, teams that are not functional struggle to get to that decision point.
21:07
Out of all the boards that you’ve been on, can you name a few companies or few boards that stick out as being some of your favorites, and the ones that you enjoyed the most?
21:20
One from a long time ago, I think that was a really effective board was the Zynga board. It was a small board. But it was one that was was very engaged and very active. In supporting, you know, Mark Pincus, who was the CEO, but helping Mark think through things in a extraordinarily dynamic environment very fast changing. And with extreme growth, so like, I feel like that team, which was at the time the board was, when I was on, it was me, Mark Reed Hoffman and Ben Gordon, we all brought something very different, we each brought something different to the board. But the way we interacted with each other around issues and around the rest of the team worked really well. I think another board that I was on for a period of time that I would consider to be highly effective was the SendGrid board after a CEO transition. So the SendGrid board sort of got to a certain level, or the SendGrid SendGrid, as a company sort of got to a certain level, meaningful size business, maybe 40 million bucks or something like that. But we’re starting to have some challenges, growth was slowing, there was some vibrations and different things. And the board ultimately decided to make a leadership change. I had not been on the board. I joined the board. Just shortly before the leadership change. We recruited in a new CEO, Samir Dholakia, who did an extraordinary job of both leading the company and then building the company for it and ultimately going public and then got bought by Twilio for a couple billion dollars. But the period of time that Samir took over running the company was very, very bumpy. When I look back, you know, with the benefit of a lot of hindsight, I think, a year after he joined, there was only one person from the leadership team that was on the the leadership team at the company, when he joined, that was still at the company a year later. Okay. And that was the General Counsel. So like the whole leadership team for various reasons, including some of them, who were very unhappy that the CEO had been the prior CEO had been replaced turnover. But it was a period of time where I think the board was very focused in being helpful and supportive to Sameer, and to the team that was there, and the team that was evolving and developing as they had a really good business and found their footing and took it to the next level. And it functioned really well during that period of time. There’s a couple of examples.
23:59
Were you an independent, or were you an investor?
24:02
Foundry was a large investor, I joined the board. We we move boards around at foundry periodically. And I would say that times that we move boards around tend to be a function of partner load. Or in some cases, just lack of a better phrase partner fatigue. I can think of a situation I’ll use I use a case from a different version. I was on the board of two companies that an entrepreneur who I’d worked with for many, many years, going back to one of my first angel investment guy named Raj Bhargava. He’s not running a company called jumpcloud. And Raj was chair of a company that was struggling company called Mobile day which ultimately failed. And then he was also CEO of a company which he cofounded that evolved in turn into jumpcloud. And I was on those boards, but I was also on a bunch of other boards. And I was just, I was just tired. I mean, I had too much going on, I had a couple of pretty intense things happening on a few of the boards. And my partner, Seth, basically, just one day he knew I was he was stretched and he had some capacity. He said, Look, I’ll take over, he knew Raj, and they had good relationships. And I’ll take over these two that Raj is involved in. And I know that, you know, mobile day, whatever. I’ll see that to its end and for jumpcloud. You know, it’s, it’s still very, very early, but I’ll work with Roger, and we’ll try to figure out where, where it goes. And, you know, that’d be an example of us sort of looking out for each other as partners. And, you know, Seth and Raj did extraordinary job, work well, together. jumpcloud, you know, now is a very large, I think they’re almost 1000 people. Very, very successful directory as a service business. And, you know, it was totally fine for me to step off the board, I could continue, I still have relationship with Raj, I still help with the company, but I just didn’t have that responsibility. And on top of other things, in the case of SendGrid, my partner Ryan McIntyre, was on that board. And I think he had just hit a point with the company where he was he was, he was tired. You know, it had been stressful dealing with the CEO transition, there’s a lot of things that were going on that were not necessarily, you know, easy to easy to get through. You know, some of them were self inflicted whatever. And I, he went on a sabbatical for about a month, and I stepped into the board seat while he was on sabbatical. And when he came back, he said, Gosh, it was so nice to go away for a month and not think about it. I said, Great. Every day, I said, you know, he stay away, you know, when you’re ready to come back, tell me and I’ll give you the board seat back anytime you want to take it. But don’t feel like you need to take it. And a year later, he said, Okay, I’d love to be back involved. And I hear you’d like
27:00
to wait, like, I’m good.
27:02
Because, you know, our strategy as a venture firm is always to look at the whole portfolio as one rather than this is my deal. This is your deal. Yeah, they’re all equal partners. The economics are the equal, like, there’s no incentive or motivation to be on one versus the other. So it’s really, you know, how can we how can we be most effective as a team, and those would be good examples of it. So, you know, for me, it was a delight to hand the board back to him in a moment in time, where he could say, alright, I have energy for this again, I really love the company. And it’s, you know, a lot of the stuff I was struggling with, it was wearing me out, is in the past. And let’s go forward.
27:42
Yeah, yeah, as your board experiences accrued over the years, if you could rewind the clock and give your younger self, like your younger self being a board member, one piece of advice, what would that be?
27:55
Don’t tell people what to do. I think I’m mostly good at not doing that anymore. Every now and then I’m sure it comes out in a way where some of the people in the room are interpreting what I’m saying, instead of hearing it as data or hypotheses, or suggestions, they’re hearing it as things to do, I try really, really hard not to tell anybody what to do in the context of being a board member. Sometimes, especially if it’s a new relationship, I try to be really clear about, excuse me be really clear about here’s my hypothesis. Here’s how I think, you know, here’s how I think about it. Or here’s just some data, throw it away if you disagree. But I try to work for the CEO. I try to be a part of the team, rather than be telling them what to do. And when I was younger, I was chair or vice chair of a number of companies, I will never do that, again, because people interpret the chair as having a different kind of authority, which it does, the chair does. And sorry, not vice chair, but co chair. So I’d have like there’d be two chairs. And I just don’t I don’t want that because I don’t I don’t want the extra authority. And I don’t want people to hear Well, Brad wants this to happen. Therefore, I must go do this to happen. A quick funny story that demonstrates that. I was co chair of a company that was public company, called an ROI. We bought a bunch of web hosting companies. And then we became a thing called an application service provider, which was the precursor to SAS. This is in the late 90s. And generally, when we bought a company I go visit the company after we bought it sometimes before but there was a deal team and I was traveling all over the place but I tried pretty hard to go visit the companies after I after we bought them. And I was with you know with a CEO, we just bought their company and we were really excited about the company. It was not huge business, maybe $5 million, but they were profitable and entrepreneurs totally is self funded. And, you know, you get to the offices and part of the part of the reason that the company was doing well was that they just spent no money on extra stuff. And you know, the offices were, I would say, appropriately startup shabby, but they were pretty shabby. And even on a relative basis, and we were just walking down the hall and I was tired, I’d probably taken a red eye or whatever. And I was, you know, cheerful and happy mood. But I made some offhanded comment without really thinking about an offhanded comment, as I’m walking down the hall with the, the founder of this company, I said, Man, that wall could use a coat of paint. And I meant it as a compliment. Like, I kind of meant it as a good thing that you’re not. I mean, he didn’t hear it that way. Right. But like that was, what was in my tired brain was, oh, you know, they’re not wasted money on fancy offices. That was what was in my tired brain. I could have said, you know, I’m really proud of you for not wasting money on fancy offices, that’s good thing. But I said, Oh, that that wall could use a coat of paint. Next day, I was there for two or three days. Next day, I’m there and there’s somebody painting the wall.
31:00
At least, the trust is there.
31:06
I didn’t remember the day before. Like I you know, too much was going on at this time. I said, I said, Why painting the wall says, Well, you told me that it was shabby. Or you told me the one needed some pain or something? And I’m like, No, I didn’t mean that. Like, of course, that’s what he heard. Of course, that’s what came out of my mouth like so I try not to do that. Because sometimes I’m right. But a lot of times I’m wrong. And my observation in my data as a board member, is something that the person running the company the CEO ultimately needs to make the decision about not me.
31:40
Is was there a seminal moment? I know you gave this story, but I’m sure that this learning came from some reflection, or what was the inflection point where you took a step back, and you said, okay, like, as a board member, I need to re reconfigured the way that I’m delivering feedback to founders where it’s not as prescriptive, but giving them the crumbs and seeing if they’re able to put the pieces together.
32:07
Yeah, and I, I just make one comment, I don’t think I give people the crumbs, I give pretty direct data. And a lot of times, I’ll serve the data up on the plate. But it’s still there just to decide whether to eat or not. I think it evolved over time, I think I just became more more comfortable and more aware of the importance of as the person not in the CEO seat, engaging in the conversation, but not telling people what to do. And as I got more comfortable with that, and better at it, and you know, saw the mistakes I made when I wasn’t doing a good job, because there’s lots of examples. When I look back over the last 30 years were like, Man, that was a shitty job there. Whatever I decided to do was really unhelpful. You know, and knowing that I’ll still make mistakes, because that’s part of the nature of the beast. But that I can I could do a better job. And part of doing a better job was being really clear that I was providing suggestions hypothesis is data, not demands, or making assertions or stating truth. I had once somebody say to me, you know, I need to push back on you. Because, you know, I need to show that I can tell truth to power. And I said, Well, I don’t know if I’m power. You know, that’s up to you to decide. But I’m definitely not the source of truth, even if I’m our so I’m glad you’re telling me the truth, because I don’t know the truth to a lot of things. I just have ideas.
33:58
How do you go about building trust as a board, we’re both with the founders, and then also with other board members, giving them a safe space to be critical and give real feedback and try to put egos aside. So collectively, you’re all rowing in the same direction, solving hard problems together. I just be curious to hear what you’ve learned on that. And because I’ve just started becoming a board member, and I’ve noticed everyone likes to have an opinion on boards, and sometimes it causes, you know, the real meat of the issues not to be addressed. So we’d love to hear any advice you have on building that environment to have a safe space where he goes can be put aside.
34:41
I think trust comes from lots of different places. And again, it depends on the personalities involved in the way the interactions unfold for my frame of reference trust happens over time. But people have different approaches to it. I’m extremely a My nature is to be very quick to extend trust. And so kind of my default mode is to be trusting and to, to assume that the other person is trusting me. And I only withdraw trust when there’s deceit. I don’t withdraw trust when things don’t work or when you have disagreements or you argue about things, but when there’s deceit, so I have a pretty good, my own version of processing. A lot of people are very different than that. And there’s ranges of difference. The the sort of other example would be the person who’s very slow to extend trust. And the only way that they build trust is through shared experiences where the other person does things that earns their trust. I think it’s important to know, or at least have a sense of the personalities around the board table. And one of the things I think that comes out of that dynamic is what happens when different board members are open with each other about how they’re feeling. You know, the cliche ish language used in our world now is emotional intelligence, or EQ. And paying attention to one’s EQ and paying attention to others EQ and learning how to relate to each other is the way that you build trust in the boardroom. It’s not, you know, silly trust building exercises, where everybody goes for a retreat for a day and falls into each other’s arms and stuff like that. I mean, those things are not probably not hurtful, but they’re not, they’re not the thing, the thing is working on stuff together. And understanding how the other people that you’re interacting with internalized conflict, how they react to disagreement, how they behave, when disappointed. Like, you know what those negative things tend to build trust, if you understand how the other person engages all the good stuff, when things are going great. And everything’s working and everybody’s happy, like, you know, that’s, that’s, I use the word default mode earlier, I use it again, that’s kind of a default mode. Like you start with a situation where it’s like, everything’s great. until it’s not. And that’s when the trust gets built up when things when things aren’t great. And people have to actually show up and engage and interact and solve problems together.
37:26
Do you encourage founders to call out perfunctory board members?
37:31
I would say I am… call outs, the thing I’m slowing down on and answering his call out, I encourage founders to address the issue. It’s hard depending on who the board member is, and what role that board member is playing. So if it’s a co founder, it’s different than if it’s an independent director. And that’s different. Again, if it’s a venture investor, especially if that venture investor is entitled to a board seat, through their investment. It then also depends on what the expectations are. I mean, there are definitely board members who are like, Oh, why are you calling me out on this, I didn’t know that. That was the expectation. You know, there’s a wide range of, of personality types. And so somebody might be unhappy with somebody else who’s doing a perfectly good job, you’re just unhappy with their delivery, or you’re unhappy with their, their style, or you might be actually unhappy with what they’re saying, even though what they’re saying is quite valid and important to hear. So, you know, it’s it’s a little more nuanced than, you know, non performing or underperforming board members, because you have to define what that actually means. Now, if a board member doesn’t show up to a board meeting, or shows up every board meeting late or doesn’t show up prepared, you know, you can call out the individual or you can reset the tone for the whole team, right? Hey, board, I know everybody can read. Since y’all can read, I’m sending out the board package in advance three days in advance. And since I’ve sent it out three days in advance, and since everybody can read, I’m going to presume that you’ve read the board package in advance of coming to the meeting. And if you haven’t, please say so. So at least I’m aware that you haven’t had time. You know, you set an expectation like that. Everyone’s going to read the board package. If somebody hasn’t read it for one because they couldn’t or they’re on vacation or whatever. And they say it you’re like, Okay, got it. If four times in a row, the person said sorry, I was too busy to read your board package. They’re not prioritizing you. They’re not prioritizing your board, something else going on, like you can have the conversation in the context of that expectation that was set.
39:44
Yeah. Aside from reading the board package in the pre read, is there anything you do to prepare for board meetings? Anything that might not be so obvious?
39:56
I think there’s a lot of value in being continuously engaged with a company in some way. So I would say, again, this will vary a lot depending on what the CEO wants, or needs. There are some companies where, you know, I have interactions with the CEO on a multi time a week basis, and there are some situations where it’s infrequent. But in the context of what the company needs, trying to make sure I understand where they’re at what’s going on, in a more continual way than just Hi, I’m here at the board meeting. Now, tell me again, what you do. One of the ways to do that, and most of the companies I’m involved in, I think maybe all the companies I’m on the board of do this at this point is instead of sending out sort of combining the financial material with a board meeting, I just get a separate monthly financial deck for every company. So at the minimum, there’s a monthly touch point, because the financials are going around, and the better CEOs write up, you know, whether it’s a CEO letter to go with the financials, or whether it’s an MDNA, you know, or something else, or a slide deck that describes what’s going on, like there’s more material than just here’s your balance sheet, income statement, cash flow statement. But, you know, the best board members are continually or the best CEOs are continually feeding the board information about what’s going on in the business good or bad, good and bad. And as a result of that, the board members have multiple ways to engage, versus just show up and you know, sit with arms crossed at a board meeting.
41:42
I could I could pick your brain about this for hours. But, Brad, if we could have anyone on the show, who should we have? And what would you like to hear them speak about?
41:52
Can we have dead people on the show?
41:54
We can try? Who comes to mind? Can’t promise we’ll get them.
42:00
Yeah, I think Albert Einstein be good.
42:05
Right there.
42:07
I didn’t even see the headset. Yeah. Who should be on the show? I you know, this is the full ratchet. Do you just interview VCs? Or do you interview anyone?
42:17
will interview founders or VCs? And we can make an exception for you.
42:24
Okay, well, I if you want a good science fiction writer, I’m going to give you three who are who are all people I know. So if you want to interest any I’m telling me one is David Wald. And I just read a blog today about his most recent book. He’s He’s outstanding. Eliot pepper, who has spent a lot of time as an entrepreneur, I think is would be really fun and interesting, and is also a writer, and then another longtime friend, William hurtling, who’s written a number of books, I think each of them would be fine. I think probably David, is the least engaged in entrepreneurship, from what I know of his background, the other two both have lots of sort of intersections and overlaps with it.
43:12
So if we were able to get Albert, what would you want to hear him talk about?
43:18
I would want to know how much of the mythology around how he came up with ideas is right, versus how he really came up with ideas. Like, what was really going on? And how was he thinking? Was he sitting there scribbling with a notebook? Was he, you know, was he really daydreaming in a parallel universe as he was living life? You know, was it sort of random intersections of different people have different thoughts? Or was it a very deliberate exploration of something over a long period of time? So I’d like that I’d love to hear what he really thought about Murray Murray gell Mann, and, and I probably want to see it since if you’re interviewing him, I’d want you to interview him in the middle of Times Square, and see what he thought about what was going on at Time Square today.
44:18
I think if we were able to get him we might be able to pull off the Time Square as well as the venue. be great if Alan Turing could join him and give us his thoughts and where he was headed with chaos theory too.
44:31
14 and around for the day. And Tom, I’ll tell you what they think about what’s going on.
44:36
Yeah, yeah. Right. And, I guess, what resources have you found particularly valuable, and what would you recommend to listeners?
44:48
Well, I think today there’s a an overwhelming amount of content around entrepreneurship and venture capital. I think some of the best stuff is if You go back in time, pre 2010. And mind some of that, and, you know, riders alike and people who had who had active blogs back then Fred Wilson, who still has a very active blog today, but I go back and read some of his posts from you know, 2007 2008 2009, Dave Hornick, who was one of the original VC bloggers, go back, he doesn’t blog much anymore, but go back in time to some of his early posts. I think that stuff is really rich, because it was before there was the VC, as content provider to generate, you know, inbound marketing, deal flow, expertise, relevance. Another fun thing, you know, Harry steppings, has mastered the art of the interview. You know, and as a 20 minute VC, but if you go back to like some of his very early interviews, something with a number less than two or 300, and pick out some people who, today are still known, and listen to what they were saying whatever it was 1015 years ago, probably 10 years ago, not 15. I don’t know how long ago, those were. And it might have been longer than 10 years by now. I think there’s some really juicy and interesting stuff there. Because, you know, in 2010 11, as we came out of the financial crisis, there started to become sort of this next wave of VCs activity, which really accelerated 2012 to 2015. But the content piece of it was also part of it prior to 2010, the content piece was not central, it was harder to do it was not prevalent. And as a result than the signal was much higher, versus what you get today, which is just a lot of stuff. There’s a lot of signal and input, there’s a lot of stuff that you have to mind to get the signal.
46:59
Yeah, absolutely. What do you know that you need to get better at Brad?
47:17
I don’t want to get better at anything. I’m very happy with the the endless evolution of all the stuff that I’m involved in. So I don’t think I have a goal to get better at anything in particular, that’s why I sat and thought about it for a minute, there’s, there’s not one thing that I I’ve enjoyed. I enjoy developing some level of experience on a curve to mastery over lots of different things. But I don’t feel the need to have a regimen of continual self improvement. Some of that may be that I’m just getting older. And I recognize that at some point, you know, my time will be up. And instead of striving to get better at things, I’m much more focused on experiencing what’s happening. And, you know, I’ve accepted that I screw up a lot of stuff, and I get plenty of things. Right. And that part of the experience is both of those things.
48:14
Do you think you’ll practice venture until you pass?
48:16
No.
48:18
What would make you what would make you want to stop?
48:22
I don’t have an answer to that.
48:24
That’s fair.
48:25
But you know, I don’t aspire to be i I’d like to live a long time. So I am 56 and a half I aspire to be old. We’re old is probably got at least an eight in front of it or a nine in front of it or maybe even three digits. And if I make it to 94 I’m not doing venture when I’m 94.
48:48
Might not be a reliable board member at that point. And Brad, what’s the best way for listeners to connect with you?
48:57
brad@feld.com is email that’s probably the best Twitter’s @BFeld. But email is probably best.
49:06
All right. Well, everyone he is Brad Feld. And Brandon, thank you again for joining us,
49:11
Nate. That was fun. Thank you.

Transcribed by https://otter.ai