Common Mistakes that a Startup Founder should not do with

Board of Directors

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How do you define a Startup Failure

 If failure means liquidating all assets, failure rate for startups is 30%
to 40% , with investors losing most or all of the money they invested.
 If failure refers to failing to see the projected return on investment,
then the failure rate is 70% to 80%.
 And if failure is defined as falling short from declared projections,
then the failure rate is 90% to 95%

Mistake Number 1 Infrequent Communication

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“The marketing tests for your product or service might not be accurate. “
“ Unforeseen complications can emerge.”

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If you need your board for advice or additional funding, you should
not put them dark during dark times.

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Communication between directors and founders/CEOs must be ongoing
and not episodic.

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Even if startup is experiencing smooth sailing, the board should remain
fully engaged and informed.
It is important to celebrate small victories and to include the board in
that process.
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The board loves receiving good news so why keep them from that?
Startups need to cultivate a celebratory culture and to ensure the board
feels a part of that culture

Mistake Number 2 Camouflaging bad news and

Sugarcoating it

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Some founders go dark or avoid communicating with their board
during tough times.
Founders are fearful of how negative news or bad performance is
received.
Even worse, they try to project that all is well when startup is passing
through natural challenges it is bound to face

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Remember , Board agreed to serve on the board in first place because they
believe in you and your company.
They bring a wealth of experience to the table.
They have likely benefited from the advice and counsel of others in the
past and are happy to pay it forward.

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Mistake Number 3 Giving up your Power of Control
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The board of directors is there to provide broad guidance and
governance, not to run the company.

Founder and board are partners with roles that are complementary
but different

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Founders should say,
“I have a problem.
Here’s what I'm thinking about.
What are my blind spots?
What am I missing?
Do you predict a better way of doing things ?
Do you think from your past experience , that if we fail , how bad we fail ?

With this approach, founders can retain operational control, and

keep the board confident in their ability to problem-solve.

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Mistake Number 4 Not being ready to lend ears for diverse opinions
“ A good board can save you from yourself.”

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“ Facebook ignored early warnings from their board that user data was
vulnerable to being compromised. This led to the Cambridge Analytica
scandal.”

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 Transparency and trust should guide a founder’s relationship with
their board of directors
 Lean on them but do not expect them to do your job.