The board is a key part of the team that makes the startup successful.
When you are in the early stage, using family and friends funding creates an informal advisory board. Try and meet with them monthly in a coffee shop and keep it to three members.
After you launch your product and start raising funding from outside of family and friends, create a formal board with three members, two members from the team, and one investor.
Most of the focus is on the core team and the essentials that must get done by the founder.
As you grow into a Series A raise in which you seek institutional capital, consider increasing the board to five members, two from the team, two from the investors, and one from the industry that is independent.
The board expands to include a domain knowledge expert and investors who can help with the growth issues.
As you start to scale and raise Series B funding, expand to seven members with two from the team, three from the investors, and two from the industry. Later-stage investors are putting in large sums and will demand a board seat for their investment.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
Let’s go startup something today.
Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.