What is the board’s role production early-stage startup?

What’s the board’s role in an early-stage startup?

Startup founders frequently ask me about the role of a board of directors. A board can be a crucial asset in an early-stage startup.

Here’s a framework for how it can help drive success at your company: Strategy, People, Image, Finance and Systems for compliance, or “SPIFS.”

What is a board of directors, anyway?

The board of directors helps with governance of the company. U.S. law requires that any company have one, though does not require how big it should be. By generic definition, the board of directors consists of elected individuals that represent shareholders. It is the governing body that provides company oversight and helps set business policy and strategy.

On a more practical level and in a startup environment, the board can aid in creating a successful business strategy, putting together the right management team, developing branding, building good financial habits, and avoiding legal and compliance issues. The needs and composition of the board will change depending on the startup’s stage, management and financing history (e.g., if there are preferred shareholders, investors that require a board seat and more).

Investors often ask founders about their board: It says a lot about their character, their judgment and their willingness to be challenged.

Investors often ask founders about their board for two reasons. First, it says a lot about their character, their judgment and their willingness to be challenged. The founder can typically choose who is on their board (through careful selection of investors and advisers) and negotiate a board structure they prefer.

Typically, a healthy board will have a good balance between common shareholders, preferred shareholders and < a href="https://tylerjewell.substack.com/p/independent-board-member-guide"> independents . It also helps investors and then analysts understand who will talk to critical questions and give beneficial advice to the company’s having fun in management, especially when the checking gets tough (it without doubt does! ).

What exactly can a mother board help you do?

After 20 years as a opportunity capitalist and board person, I boiled down the value of a suitable board into five fundamental pieces under the acronym SPIFS: Strategy, People, Image, Matters of finance and Systems for compliance.

SPIFS matrix that describes the role a board of directors plays in an early stage startup

Image Credits: Dell Technologies Capitol


Setting businesses strategy is one of the main options the board helps younger founders, especially if it’s their new running a business. It is a valuable sounding board for validating need taken a sober account of the market and have the legal right plan to develop your product and acquire customers.

Finally, the board should ask this type of questions when guiding younger founders through setting strategy:

  • How do I get?
  • What hindrance am I solving?
  • Why is my product top to solve that problem?
  • How do I differentiate in opposition to my competitors?
  • Do I have the right go-to-market strategy?
Article Categories: