 Good morning. Thank you for making it out so early. We've thought we were going to be speaking just the two of us But it looks like it's a packed audience. So Matt, thank you for being here. Thank you for having me Yes, so we are going to as you just heard be talking about working with your board Which should be a ubiquitously sort of interesting and useful topics in every company sort of legally needs one and with me here I have Matt Miller of Sequoia and with that let's let's dive right in so so Matt You've been at Sequoia for nearly a decade and you are on the boards of companies like Confluent, Graphcore, Tessian and many more So through all of this experience, what is the most important lesson that you've learned from being on different boards? I think that the thing that you need to most figure out is what you want to get from your board And different CEOs have different styles and different founders have different styles about what they would like to get Some of you the board is kind of this reporting session where I'm going to report on the progress of my business Here's the things going on. Please give me some feedback or let me know if you have any thoughts Some of you their boards more as a strategic session Where they expect the board members to have read into the materials be current on the business And they focus on more of kind of two or three key important items and they have it more of a discussion I tend to prefer that that approach to board the board But really it's up to you in the style as to what you would like to get from your board And I think like a key part of that is to keep your board small and keep that room small so that you can have Really good discussions really good interactions And really benefit from the experience of the people that you have around the table that may be seeing things From a different perspective or a different point of view or at least have the benefit of being a little bit removed from the day-to-day operations of the business So just to quickly jump on that. What's a small board set series a versus that series e or f? Yeah, so a series a might be just the founders and an investor or two And and or maybe one, you know a series a series b stage may be one Independent that you've recruited and so it could be two or three people You know at the at the later stages as you get towards being a public company You'll probably have a board of eight to ten people that can be that feels large But that is that's probably the appropriate size for a public company board Just because of all of the responsibilities and committee assignments and things that you need to have from a governance point of view But again like keeping that room small like one of the things that can happen along the journey is As you pick up investors you pick up observers and pick up different people and the room can quickly grow large on you And you want to think about how you can keep it small and tight So that you can have those very good personal interactions And very deep strategic conversations with people who are actually really focused on trying to help you and help the business succeed Very good. I'm sure we'll unpack many of those mechanics in a bit more detail But uh, let's go with this. So sequoia partners You're famously partners with companies from idea to ipo ipo and beyond I mean you've just announced the sequoia capital fund Which is all about enabling you to really stick with companies for a very very long time And I think one thing that founders may find surprising referring back to the um the the discussion We just had is there are you know many similarities between board meetings at the earliest stage And at the at the later stages. Can you tell us more about that? Yeah, so I mean the There's a little bit of a difference in the go-to-market Aspects of an early stage versus a later stage business But at the end of the day the board meeting is about the two or three most strategic things That are impacting your business And and that can be in the early days around product market fit or landing that incremental You know executive or experience tire to come help build the business or getting the next 10 engineers in the later stages That can be thinking about an international expansion or a new product launch or maybe an acquisition But but regardless of the stage of the business. It should just be focused on taking a step back For the next 12 months, whether the two or three most important things and what should we talk about At this board meeting to make sure that i'm getting the insight and perspective I need to focus on those big picture items in addition to the day-to-day running of the company And I think that I also think that one of the things to remember is There's a difference between like the most important strategic items and urgent items So oftentimes you can have this tendency To focus on things that are very urgent in nature in a board like i've had companies where there might be a security Matter that should be discussed and it's important But you can quickly spend the whole board meeting on something that's urgent but not strategic And just make sure that you take the time to think about the big picture things because you'll figure out the security matter Or you'll figure out the small urgent item that's come up that needs to be addressed right then and there But but the things that you don't have enough You'll never have enough time for is thinking big picture taking a step back thinking about the big blocking and tackling items You need to make sure that you achieve to accomplish your bigger grander vision over time Yeah, that's probably a very important function of a board is forcing founders But they're monkey branch to actually you know take some time every whatever it's one month two months to actually zoom out and Think about the big picture. Yeah, absolutely. And kind of weave you our role as board members is In good times we should be pushing and we should be encouraging you and trying to help you Think think bigger think, you know, think about things in a different way bring a new perspective Introduce you to somebody who may open your eyes to something about how how you can better solve a problem But then also in the hard times We should be the shock absorbers and be there to support you and help you, you know get through get through the most challenging times All right, so let's talk about relationships between founders and board members and you know when you talk to founders or or board members on the other hand They often talk about the importance of trust between sort of board member and founder investor and founder So how do you build that kind of trust? Yeah, I think it's really important and it's something where you You know as a as an investor where I serve on multiple boards I try to figure out the style of every CEO I work with because everybody has a different style that they like to engage But you need to form connections with the people who are investors in your company and and around the board and the most The best way to do that. I think is just to be vulnerable You know after the investments closed Work on really building a good relationship in a way that works for you and be very open about the real things happening in your life The real thing is happening around the company You know, you don't have to have this constant relationship of you're trying to show you're always you're just your very best self It's really better when you show like who you really are And what's really going on and your board members can do the same And then you build a very good tight relationship so that you can be there to support one another and help one another Through the journey and I have founders that they like to do that by text messaging and they text message me You know late at night throughout the week I have founders that want to have a monthly call where every month we get on the phone For an hour or two hours outside of the board meeting and talk about everything going on I have some that like to get dinner. I have some that You know, they they they just want to interact maybe once a quarter It really is kind of up to to the where you're at in your journey How experienced you are as a founder per se But but making sure you put that effort into that relationship because then when the times get tough you just have a lot more A lot better Your investor will have a lot better perspective on you and be able to be more helpful to you and your board will be able to Be more helpful to you All right, so we we already touched on this but just to kind of underscore some of the points you made Um, how does a good board member provide value? Yeah, so I mean a good board member gets to work And I think this is like a really important thing in assessing who you want to have on your board You want to have people who are willing to work And and I think that that takes a couple a couple different things one is That they're willing to help you close recruits. They're willing to help you identify people in their network They're willing to go the extra mile when you think about eventually bringing independent board members to your company There are there are amazing independent members who will come in challenge you and work with you and spend Half a day with your engineering team of engineering is their discipline or half a day with your sales team If that's their discipline you want people who are going to come and and work And then the other thing is is you have this benefit from your board of these are people who are generally Pretty intelligent who have a perspective on a more than one interesting business in across their careers Hopefully many interesting business across their careers and they kind of sit at like this 30 000 foot elevation Flying over in an airplane and they're looking at your company and you're kind of day to day Kind of in the ground fight, you know fighting to win And and and dealing with all these issues on the ground that 30 000 foot perspective is so helpful To kind of help you zoom out and see how things are things are working and and to take learnings and perspectives from what's happened in other businesses How other people have approached the problem and help you really Think think more broadly about how you can help build your business All right, so let's go into the mechanics of how board meetings are run very soon But you mentioned independent board members twice now, so let's actually unpack that first So in an adventure back startup, which which I'm sure a lot of the audience will represent Obviously the sort of single biggest constituent group of their boards is investors typically lead investors in their past rounds Yeah But on top of that you've now mentioned that you might want to be looking for independent board members So how do you find us think about that? When does it become relevant when it becomes relevant? What kinds of sort of gaps should you look to fill? Yeah, an independent burner can be like an independent board member can be like an afterburner on your business Like, you know, I don't know how many of you know these military airplanes They add these afterburners doesn't go really fast An independent board member can be like that. They bring out a whole not another set of perspectives They usually have a tremendous amount of experience They can be a tremendous mentor to you as a ceo founder They could be a mentor to different people on your executive team They can bring a really great perspective and connections And the the the way to think about it is the more of a sure thing your business get becomes over time The more experienced Independent board members you'll be able to recruit. It's kind of like when you're recruiting executives The further along you get the more success you've had the the higher quality people And so it's determining when is the right way time along the journey Maybe you will be fortunate and very early in your journey You're going to attract somebody with really unique perspectives And and bring them into your bring them into your board And if you can you should do it because you'll benefit from having that afterburner on your business You you may choose that you want to wait a little bit so that you can get somebody with a little bit more experience That may not consider joining a board of a 10 person startup And they may will they may be waiting until you have a couple hundred people or tens of millions Of revenue and it's really kind of a personal thing based on who's out there But your board members should constantly be introducing you your investors should constantly be introducing you To people who could be independent board members and you should be doing that assessment From from day one thinking about what you want and what are the the recipe of people you want to create Around you and around the company to help get you guided and and build it into a success So on a very specific point Investors and boards are clearly not compensated in any way But should you grant equity as sort of incentive to your independent board members? You should absolutely grant equity to independent board members because you want their skin to be in the game You want to align incentives with you? You want them to feel like there's something that they're working for and it's a fairly standard practice and Most venture companies to grant equity to independent board members Do you have a typical percentage like is it one percent? Is it three quarters of a percent? It ranges based on stage of stage of the company and most companies it is in the vicinity of you know 20 You know a quarter to a third of a percentage point Okay, uh invested over four years All right very good now. Let's dive deep into the into the mechanics So you already mentioned uh that board meetings should be an opportunity for founders to kind of zoom out And that's probably an important heuristic for for approaching board meetings Are there some other important heuristics that founders should should sort of know Or apply when when thinking about there to work with the board Yeah, I I I think the biggest one is is you want you want to think about how you can educate your board On what's happening ahead of time and you keep them in the loop with what's going on And then what are what are the things that you can learn from them? And what are the things you can gather from them over time? And how do you encourage those types of conversations? One you want to have those conversations regularly outside of the board meeting Through the frequent touch points that we talked about earlier based on what works best for you So that you're not you don't want to show up at a board meeting And that's when your board member surprises you that hey, I think the annual plan should be 20% more aggressive You'd kind of like to get that feedback before the board meeting or when that investor thinks this You want to have those open channels of communication? But then you also want to set up for the board meeting this these discussions where you can think about You know, what what what is this thing? We should what should we think about kind of on the competitive landscape front? What should we think about on the go-to market strategy? You know, should should we try more of a bottoms-up motion? Should we try more of a tops-down motion? What are the trade-offs given given our market? You want to be able to facilitate those kinds of conversations? You know board members, what have you seen from the other bottoms-up companies that you've worked with? And and how can that possibly apply to our business? You know if we're in the open source world, what type of licensing should we pursue? What are the ramifications of the different licensing those the kinds of conversations you want to have? That that that and and the founders that that do well seem to create this atmosphere to have those Very good So going now down really deep into how board meetings actually work Which I think will be very useful for for some of the early estate founders who may just be establishing a sort of more formal Board meeting on a regular cadence. So let's go through some what you might call like rapid-fire questions Starting with like how often should startup boards boards meet and how long should the meetings be at the early stage? I'd really like to have a board meeting every six weeks twice a quarter Because I feel like the iteration cycles are so quick and it doesn't need to be a long board meeting with a lot of formal Prep it can be a very informal board meeting with a few slides as the company gets a little bit further along once a quarter And kind of in the three to four hour Time reign is time frame is what I like some companies like to keep it two to three I rather have just a little bit more time for conversations I think an important I've really I realize you want rapid fire But an important thing to remember is to save time at the end for a closed session So that you can have a session where it is you with the board And any executives or guests you may have invited to participate Are gone and you can have the chance to get the real feedback Because so oftentimes boards run through their time and you don't have that you don't have the chance to To to get the feedback like that you might want that they may be hesitant to share With your vp of sales or your vp of marketing or your engineering leader In the room or on the call So when you say you you're clear referring to the CEO and then to the founder Yes, exactly. So on that point who else should participate in board meetings and in what way you should absolutely have your executive team participate Um, you should think there's two different styles One style is to bring in the executive team for the entire board meeting Which if that helps you run and again, I'm speaking to founders if that helps you as a founder to better run your team Great then do it But it also might not be the best use of everybody's time Another style is bring in the people who are relevant to the conversations you're having So if you're going to have a board meeting where you're discussing go to market is the primary focus Bringing your sales and marketing leaders, but you may not need to bring your engineering leader into that If you're going to talk about Engineering and product you may not need your go to market leaders in that session in that part of this In the part of the session It's really up to you to think about how you're managing the dynamics across your team And do you need them? But again going to my earlier point the smaller the room the better the conversation The engineering and product leader may be more open to be more open about what's going on in their organization when they're not There with their peers from sales and marketing and vice versa There always seems to be Tensions sometimes between those two groups and that sales wants more product and engineering progress And engineering wants sales to do a better job selling what they have And and so dividing that up a little bit can be helpful for some conversations But bringing it together can be helpful for others. And so think through how you manage that dynamic, but absolutely incorporate your team All right, so how should board meeting agendas be set? So uh, or primarily by whom should they be set? This should be set by the founder a ceo of the company And they should you know what typically happens in the companies I work with the founder ceo has a few things They would like to talk about They usually will reach out to the board A month before the board meeting and say are there anything that you would like to talk about and they collect feedback And we spend most of the board meeting talking about the the two or three important things that the ceo Would like to discuss and and and that could be strategic things and one or two things from the board And and that that may have been that may have been brought up And then we do also do kind of like the basics like here was the quarter here was the Here's the update on the business, but that should be all kind of pre-read before you show up But we do cover it a little bit in every board meeting Here's the progress update Of course strategic things that the ceo wants to talk about of course strategic things the board wants to talk about and then a closed session So how many days before a board meeting do you wish to receive the whatever written materials two or three days? Please two or three days? Yeah Like it's so tough like everybody everybody has back-to-back calendars in this in this world now with zooms that have filled up every moment of our day and and You just if you get something 24 hours before you may not have enough time To really read it and go through it and your board should show up ready to discuss I've gone through everything and so like if you can get something out 48 hours It's amazing and some of the boards are now getting it out three days before as they get later staged have more teams They can help them prepare these materials That's great because the more chance you give your board to enter that meeting prepared The better off the meeting is going to be far enough So talking about board meeting materials, obviously, I guess traditionally board meetings are associated with decks But I guess on the back of a larger movement into very written like memo based cultures Like some some companies are using written memos as they're like more meeting materials What's your preference or are they some like benefits or drawbacks to each? I love the written memos And the reason I love the written memos it's more work actually than a board deck But when you go through and you have You you take a moment as a CEO and you write a page on what's going on in your company And you ask each of the leaders of the different functions On your team to write half a page or a page about what's going on a company Distilling it into sentences and words is just so much more powerful than 30 pages of of Numbers and and charts and and analysis into really the core succinct points that really matter And it's a forcing function to drive to that two or three most important things And so the best board material I've I've got from one of my companies was where there is a set of slides that help guide the meeting But you get beforehand you get this pack that's a memo that's like six or seven pages long Maybe ten pages long That's just these written summaries from everybody all compiled in one memo And that that I find to be the most The the best insight into the business and we had the best conversations In that board because people were prepared and and those key issues were really drawn out by that memo writing process A lot of the best kind of founders and leaders out there are extremely open with their employees So should should in that openness should board meeting materials or discussions be included Should you share them with your team either before or after the board meeting? Most people share them after the board meeting and it's really again It's really up to you. I think the transparency is a great thing and important to keep everybody on the same page So you should err on sharing more versus less There clearly will be some things discussed at the board that may not be appropriate for broad dissemination But but as far as the performance of the company and one of the key things that people are focusing on strategically I think that's extremely important to share with everybody in the company In the board meetings you attend how often do you actually like formally vote on a decision? And should you try and do that? Like is that is that important in some situations? Yeah, yeah, really at the end of the day the CEO is the running the company And so the so you are there to give feedback and perspective and help help help that CEO to make the decision And you want the CEO to be empowered to make that decision So there's not like you don't vote on a strategic initiative as an example The only things that you really vote on in a board meeting are the procedural governance related items which are You know making sure that you're approving the the issuance of new options You're approving the expansion of an option pool. You're approving the hire of an executive You know a certain level of executives and team based on what you've written out in the company's charter You're approving the addition of a board member approving the minutes But those are all perfunctory Really at the end of the day you ride with the founder and CEO and you give them everything you can to support them Fair enough and beyond that any best practices for how the best board meetings all run I'd say that that first everybody shows up prepared everybody's done their homework beforehand to as the founder be a time cop like Jay Krebs at confluent is masterful about this He's he's this brilliant savant that doesn't need the lots of materials or anything But he shows up with this little teeny notebook with how long each section is going to get Allocated and he just holds everybody to that so that we make sure that we have time Because it can be so tempting to go down different tangents with your board and and different directions Because there's all these interesting things to discuss But you want to make sure that everybody has the time you want to make sure that If if you're talking about both engineering and marketing and a board meeting That you don't spend all the time in engineering and the marketing team doesn't get the chance to share and talk about The things that are important to them and then you also want to make sure you have time for those that closed session at the end So be be be very rigorous about your agenda and keeping people on task So that you don't don't don't devolve into one of these other deep dive topics that can be interesting but then can Limit your ability to cover everything you wanted to in that time So I think we've covered the the formal work you do with your board through board meetings quite well But I'd like to unpack the informal work that you alluded to that happens outside of board meetings when you know You got what's happened by your founder Can you talk a little bit about how that happens between like with the founders that you have the best relationship with like What kinds of topics do you discuss? How do they leverage kind of your expertise and your help informally between board meetings? Yeah, so Again, it's different in every case But I'd say that that oftentimes they're talking about one of the things that are top of mind It's things. They're working through with their team You know, are they struggling with one of their team members in some way and how can you be able to help them through that? Or they're thinking about you know, how they should potentially Do something do a different initiative with the company or how they can how they can help the broader organization And and and you know, who are the people you can a lot of it is like finding interesting people to connect them to so So one of the companies I work with is dbt In which is based out of philadelphia And the founder tristan like he's a first time ceo And so for him like the one of the things we talk about is like how how to be a ceo And one of the things that I do most for him is I connect him with other ceos at different levels And so he spent time with david yotiri at manga He spent time with j creps at confluent and constantly trying to make interesting introductions for him offline So as he's thinking about the ceo, he wants to become he has lots of benchmarks and and perspectives on what What how he should evolve and develop himself And and again, it's just it's different in every case You just want to be there and if you be if you're vulnerable and build that relationship of trust early Then you have this great interchange with your investor and board so that they can Constantly be thinking of people they can introduce and the ways they can help and then you can feel very open of just talking about whatever's on your mind Absolutely on a very specific point A lot of startup boards, especially in the slightly later stages have what's called a board observer It's typically an investor. So what is a board observer and why should you allow your like when when should you allow your vcs to kind of a point one? I think you should have as few board observers as possible So and and that's not and by the way, I've been a board observer So it's not you know, it's not negative on any specific individual It's just a board observer is often when somebody invests in a round They will ask to have an observer seat to have somebody to be able to sit in and listen and participate In the board meeting they will not have the formal responsibilities Of being a board member and typically once your company goes public The board observers didn't no longer attend these board meetings because You're public at that point you're a public company There the the benefit of it is is you get to have more of your investors in one room And and it gets you get the update on the company The negative of it is the room size gets bigger and bigger and bigger and then once you have board observers It can be just it's a challenging thing to then say, you know what? Guess what? I don't want you to be an observer anymore and come and it can be sticky because they may have requested that right at the time They invested and so my advice is limit observers Only the most key people you want in that room only the people you really trust and really want their opinions Don't let there be observer sprawl I'm on a board where there's observer sprawl and what we have to do is we have a board meeting And then we have the real meeting And and it's just a waste of time because we have to meet the needs of the of the obligations to all these observers And then but then we need to have a forum to have the real strategic conversations that matter So don't be really judicious in who you let into your board room All right and starting to wrap up here We obviously we're approaching the the flip side of a global pandemic and throughout that pandemic like many age old processes have been have been reinvented And I think in terms of boards, uh, most board meetings have moved to the remote world So what's your take there going looking forward? Um, do you find that starter boards should perhaps meet remotely going going forward as well? Or would you still prefer to have a physical board meeting? I would do in person as much as you can and I try to get myself to every board meeting I can in person I fly back to california for every Every confluent board meeting now that I'm living here in europe and we do the tecton board meeting I fly to philadelphia for every dbt board meeting I do my board meetings here in europe in person as often as I can There we have this benefit that we can now do some board meetings by zoom and that may be better But there is so much more context you get from being with somebody in person It's like how much better is slush in person than it was on zoom I mean no offense was great on zoom last year But it's so much better now in person because we're here. We're together. We're interacting We're we're just so much able to pick up on so much more So be in person as much as you can And then use zoom to augment to give you flexibility to get together quickly When travel might be an obstacle Even to these remote companies pull together people when you can for these these board meetings Because it's just a great chance to connect and build those relationships and better help one another Very good, and I think we're out of time. I hope you found that we covered the topic extensively Thanks mad for being here and we'll end here. All right. Thank you very much