 Hi everybody, we're here to talk about the exciting topic of boards Does anyone in this audience Have a board for their company a few okay? So we got some very experienced people in dealing with boards on our panel today Maybe we'll do very quick introductions on On yourself and on your board Hey everyone, I'm Tavit. I'm co-founder of transfer wise I also sit on one other board for a company called very fright now and we have a wonderful board that transfer wise were Today, it's myself my co-founder and two investors Great Luciana. Hi, I'm okay. That's loud. Hi. I'm Luciana. I'm a partner at Excel. We're a global venture capital fund We invest in the US Europe and India I've been investing in technology companies in Europe for the past decade currently sit on six boards very Happy board member of Tim's board at Teshion I'm also on board of companies like deliver room in around food delivery and UI path on the enterprise software side and a few others Hi everyone, I'm Tim. I'm the CEO and co-founder of Teshion. We're a machine intelligent email security platform on our board We've got myself one of my co-founders and we've got three other investors one of which is Luciana at Excel Great, and I'm Toby couple. I'm a partner in mosaic ventures. We're a London based early-stage venture capital fund I was counting up the number of boards. I've been on I'm gonna show my age, but it's over 30 My first board I was actually on the on the operating side was at Yahoo where we had a board of 12 people half independent and sort of half shareholders and you know since then I've been on 30 venture backboards as well as some nonprofit boards and You know, I think it's a great topic. I've learned a lot over the years about boards and I think it's it's Some of the assumptions you in the audience may have about how to get the most out of your board How to build your board who are the right board members for you? They may not be the answers may not be the obvious one obvious ones that you think about so I'll start with maybe a provocative question, but you know great companies I think deserve great boards and great boards should have a group of people that have experience in building great companies That can really help the founders along their journey and have seen a lot of the challenges and mistakes that can be made and That doesn't mean it's a board full of VCs typically because VCs haven't always been on those journeys and build great companies themselves, so You know, what do you guys think of that? Maybe I'll start with tab it. I think who's a strong opinion on this one Yeah, sure. So now I kind of start from the point of view that I don't believe has ever been a company that's been made great by the board you know if you think about Headstrong founders who built iconic companies I kind of doubt that boards have played a major role in this in the in the life of these companies You know think about Steve Jobs or or think about Sackenberg or or Travis at Uber, you know You can you imagine the board member saying hey Steve you should make that screen a tiny bit smaller or you know Maybe a board member telling suck to worry about privacy or you know telling Travis not to not to be so aggressive You know and these things obviously are not black and white and you know this many of these things have come back to Hornsies companies later, but but I'm not sure I'm not sure the boards Have played a major role. You know, I'm sure in other cases boards can make an average company better possibly But I'm sure they can also screw things up badly And I think the important thing is to think about how do you separate the different elements of? governance advice and so one you know the best founders Definitely listen to advice but then they make up their own mind about what advice to listen to and you know Typically that advice will be best heard if it comes from someone who has been through the same journey and has a few scars to show You know not someone who is one of the dozen people who just started another seed fund sure Look, we'll come back to some of those questions about how you separate to think about governance How you think about the right advisors and so forth, but maybe Lutjani you want to go so what I actually agree with a Lot of what you said So it's not that controversial. I firstly fully agree with the fact that a great company is really made by great entrepreneurs Absolutely, I Will also say that of course Entrepreneurs and I'm guessing this will resonate with both of you Don't start a company because they want to follow rules or they want to be told what to do So I fully agree with all of that the way I think about a board well two things firstly I think the board is an ongoing conversation I don't think we should think about it as board meetings I mean yes those are a forcing factor to analyze your business and you know just have a have an analysis of what happened in the previous quarter But I think a good board is an ongoing conversation and a sounding board no pun intended first of all and second of all I think that I Think that yes a diverse board will will actually Hopefully add a diverse point of view. I think it's a board's job to Ask the tough questions and it's the entrepreneurs job to make the tough decisions So I actually agree with a lot of what you said But I do think having someone who challenges you having someone who who pushes you to think twice or three times about a really big Decision that maybe it's not obvious. I think that's a good thing now Is your investor or whatever board member are going to make your decision for you? Absolutely not I mean all the entrepreneurs I work with are very strong-minded people, right? That's why you drop everything to start a company But I think it's my job to to be there and challenge and listen and of course give my point of view hopefully when relevant Tim yeah, I think just tacking on to the back of that I think the best boards are like coaches to entrepreneurs rather than micromanaging entrepreneurs and I've had and maybe experience in both in both scenarios, but You you really want to have a board that is pushing you and developing you as an entrepreneur I think it's different in every case so target. Maybe it's different for you guys are transfer wise But we started the company when we were 24 Which is maybe not that uncommon in technology, but we we've benefited greatly from working with and Certain people around the table who've helped us understand what we need to do to effectively grow the business and then also The kind of strategic plays that we can make whether it's in product fundraising sales To sort of take our business to that next stage and unlock that the next part of growth So for us, it's been it's been very good But but it's been very good I think because we've chosen our board members very carefully and we thought about that dynamic and how The different the different parties are going to work together and what they're going to bring to the company so I think from for me What one of the things that Tava says it's important to separate sort of the governance role of the board Which is very very limited at an early stage company There's very little governance to do other than approving stock option grants and some other other aspects of new hires but you know the the key aspects are sort of how do you have a assemble a good group of people around you to help the business and I mean my point of view is The board is there actually to serve the founders not the other way round And I think I've been on boards where it hasn't been that and where the the investors are there Use that as a way for them to be informed about the company They they have the time being presented to they think they're the they have it's for them to tell the entrepreneurs What they should be doing and to me that's completely the wrong way around and I've seen many car crashes of companies where you know The investors are really driving things and to me as a founder the board should be there to serve you we as investors It's what I do today when I spent ten at ten years operating But as an investor we're there to help you we're in the service business of whatever you guys need And you should construct your board in a way that it's there to help you do what you want and you set the agenda So I want to talk about that which is how do you make the most out of the board meeting itself? How would you organize it? How do you prepare for what sort of? Topics should you talk about and then we'll talk about sort of outside of the board meeting as a sort of follow-up Maybe Tim do you want to share your thoughts on that? Yeah, so we try we prepare a board pack which is probably pretty standard across what most companies are doing But we try and share that board pack and as far in advance as we can it covers the basic things like Financials for the month so we do monthly boards at the moment We cover financials for the month sales figures what's happening in products. It's happening in hiring so we talk about those key things and then we try and leave as much time really for a discussion about you know something strategic or like a question or an opportunity or challenge that we've got and Generally we like everyone to come as prepared as they can be so ideally they've read all of that stuff And then they've just got their questions that we go to have they read it. Yeah, generally they do they do Yeah, there's a few kind of quiz questions in there, and I think someone recently Absolutely and the someone recently said to me that Which I'm interested in trying actually The an interesting way to run the board is to have half an hour at the beginning Where you bring in the exact team and the board can just ask questions questions to the exact team based on the data That's been provided and then for the remainder of the you know the one and a half hours two hours It's then just a discussion about key You know topics or challenges that the company's having which can also be a good way to do it I guess right tab it what if we go to tab it and then to the channel I mean agreeing with a bunch of things that Tim said totally like you want you want to send out the board pack As early as possible, you know, it's always a bit of a challenge in my experience, but you know, it's it's a basics You want to make sure that's operating metrics are Understood outside of board meetings. So like a transfer wise we we now have a quarterly board meeting But we share our operating metrics on a monthly basis. So so really shouldn't be much discussion about these things Yeah, and so and it's a question of what's topical at the moment and Depending on that which was who's gonna come and join it Is it gonna be the marketing people the product people who are joining for that discussion? And I think that kind of really defines the theme of the meeting and what when you've Made mistakes in how you've organized the meetings, I mean what mistakes have you made in the past? And what have you learned from those mistakes to how you organize your boards today? I Don't think we've figured out some magic formula in terms of how to make How to make most use of the time and you know, I think especially I can Diverging to a bit of a different topic, but it's a little bit of a question of How does the board evolve so because same people in the same room? I actually think the discussion is very repetitive We sure and you know don't think anyone is getting getting that much out of it So I think so maybe a much more important part is to think about how should the board board be evolving because Frankly, I find it hard to believe that someone who was really good at seed stage figuring out product market fit is going to be that Helpful in thinking about later stage capital raising strategies So I think that some had something that everyone should think about and I think even more importantly That's a task for the investors to think investors to think about how does it give up board seats? Because it's you know, everybody wants a board seat But then you know if we think about first of all a people get incredibly busy You know, I find it hard to believe that somebody can actually do a great job sitting on 10 boards So and second of all the rooms get stale and full of same people. So, you know, it's a question of how do we rotate? So that's a good topic. Well, come on to that one. Let's save that thought You're trying on this question. So I've had to have an effective board meeting so It's funny. I sit on a few boards and I've seen everything from very organized Teams that will send everything in advance to teams that maybe don't even put together materials That are super detailed. I will say actually that the way that Tim does it I'm not just saying that because he's here But the way that Tim does it it's very efficient because we just don't spend time on on KPIs We always know where the company is the fact that they're doing very well also helps, right? We don't have to dig that much into all the all the metrics and KPI details But we we spend most of the time discussing more strategic topics rather than analyzing well growth was X and you're a cat went from X to Y So I think that's really helpful the other point that Tim mentioned which I would encourage actually entrepreneurs to use absolutely use your board as an excuse to to a give your executive team Exposure but be just see how your executive team responds to outside factors and outside questions And I've seen this actually work very well And I've also seen this in some situations raise some flags where maybe they weren't able to answer some of the questions in the best way So I think for the entrepreneur actually and the CEO to use the board as a as a forcing Function for you know keeping their team on their toes necessarily but testing them a little bit I think that can be very helpful as well and also making them feel like they're part of the the strategic discussion And then in terms of I sorry go ahead and I'm happy to talk about the diversity part after which I think is really important I think you know I agree with Support setting a cadence I think you know probably even even more as you're an early-stage company have more frequent board meetings I think it gets you you know could be a good six eight-week cadence and and definitely you should get your executives to present And you know they should be getting good and bad grillings and say you know if they can't do that And that's also a sign of maybe they maybe they're not up to the job So I think that's an that's an important the important part and the diversity point I mean I fully agree. I think a good board is a diverse board and actually also agree with you I think a good board is is made of all sorts of backgrounds not necessarily 17 investors, so I'm actually not gonna challenge you on that go ahead. Okay, but then let me ask you here What's the next board you're gonna give up? So you have six board seats now You're gonna add you know you've got you've added something what in three years now. Sorry you've you've taken so seats in what three years In the last two three years. Yeah, so you're gonna add six more you're gonna be overbooked So when will you give up support of deliver rule for example? I think there is a natural evolution as you invest in these companies at some point that there will be an exit, right? I think actually six boards is a very good number for me right now when I feel like I have The enough time to to interact with all my entrepreneurs may add something as well I think that different companies will require a different level of attention at different times, right? So it doesn't happen that all your companies are all fundraising at the same time or they're all launching a new product at the same time I think these things come and go in waves. I know you want to be controversial. I understand but There is a natural evolution. I think at some point when you have ten boards. Yes, I agree with you I think I think the point time is trying to get to is So I'm sure you guys know this but when a company raises money typically the lead investor gets a board seat That's sort of the standard practice now a lot of entrepreneurs don't necessarily build in mechanisms to for that Board seat to go away at a certain point often the best way to do that is to sort of set a minimum ownership for that investor But there are other ways right down. There are other ways to do to sort of help Rotate board seats I think if you end up doing three or four or five rounds of financing and you end up with you know A couple of lead investors in some of those rounds you could end up with a board of eight investors and a couple of founders And then it's very one-sided you often have people who are very good at its tablet set At the earlier stages not necessarily good when you get to a thousand people So I think what one of the questions to have it is getting is how do you? How do you get encourage investors to step down from the board? What mechanisms can you can you put in as an and as an investor? When do you think about what's the right time because the again? I'm I have two I sort of two hats I was born investor an operator as an investor if a company's going really well it's sort of one of those bragging rights I'm on the board of you know transfer wise and I don't want to get off that board because that's part of my You know my calling card of my brand, but actually I I've managed these days investor What am I doing on a company's board of a thousand people? So that's that's the part of the tension that's that's created So I wasn't being controversial which I was thinking you know if you ask six more boards It's like have you thought about how will you give it up? You know Toby was mentioning something like and we actually we don't even have we haven't thought it through a transfer wise either But you know we've just been lucky that we haven't had to add board members So we still have board members who came at the seed round and seed round But you know as we and we are we are actively thinking about how do we expand our board now and you know We should be abiding in a pendants But you know if we if we had five board members who have taken one at C day BC D Bloody hell that would be horrible. So like I'm just you know curious to know how how as an investor you've thought about it So firstly, I'll I'll say that typically with a later stage investors They're not going to even want a board seat So a lot of pre IPO investors, maybe they have them You know on paper and observer seats But they're typically not as involved because they have more public markets approach I'm not sure who your later stage investors are and if that was the case But typically you see a lot of that secondly some of the the best Board members I've seen and something I certainly encouraged my entrepreneurs to do is to bring in independent board members And this typically means someone for me There are three key categories of independent board members that can add a lot of value either someone who's very good at go to market And in a similar field or someone who's very good at product or someone who was a founder or CEO of a company that's relevant And who's been throughout the entire journey So actually bringing on someone like that relatively early on I would even say around serious be ish I think it'd be very very helpful and I'm happy to give you an example So I sit on the board of a company called UI path. It's a software business started in Europe they expended to the US relatively early and They brought on board someone very well known in the enterprise software world who was the president of a ten billion dollar company and was in Ren go-to-market for the company for a very long time So firstly that person was of course very helpful in figuring out the go-to-market strategy, but secondly it gives you a certain Extra credibility extra stamp of approval to be associated with someone who's really relevant in your sector So I think entrepreneurs who are open to that. I think that's that's a great thing Tim I don't yeah, I mean the thing that I was gonna say as well. I think it comes down to I think a lot of this is about understanding the investors that you're bringing into the company. So when we When we're thinking about raising capital and talking to investors for the next round Talking to other founders about their journey with that fund You know was there a time when they needed to step back from the board or there was a natural time for them to do so and I think generally in in every interaction we've had with investors that we're talking to seriously about that and There's been at least a founder who's described the scenario where you know They're either they were on the board or they joined the board at a you know at a certain time I think that these things are transient. I think it comes down to and The fund or the investor being pragmatic and wanting to do what's best for the company and and again Sometimes best for the founders, but it should always be best for the for the company So I think again the right investor will be pragmatic and will be flexible in theory in theory. That's true Yeah in practice like I've been on enough boards and I have to know that's not always the case There's there's vanity issues There's someone's inherited a board from somebody who left their firm and they're you know, they don't always have the best You know that they they want the most efficient approach They don't always want something that's going to take time to work through to restructure a board So there are always situations where the ideal situation doesn't come to fruition and Just I was gonna say I mean my best advice to founders on this topic is go find a great independent board member Go find a great entrepreneur who you'd love to have on your board and then you know Get them into your board and if it means asking someone to step down ask someone to step down But if they see someone who's phenomenal for that stage of company for the for the skill set the company needs at that time That's a that's a good conversation It's hard to have in sort of in the abstract that you know, I'd like to expand my board or I'd like to take you off It's bring those people in Tab it I even think in practice there might be a Surreality might be that's the best companies are actually Able to negotiate not giving a board seat because the best companies naturally keeps her board smaller And then you end up with the worst companies who end up adding a board member in every round Which is kind of a compounding circle of deaths that comes this way I mean it's two things I think firstly sometimes the entrepreneur actually wants an extra voice around the table and of course Diversity is important. I will also say not all investors are created equal just like not all entrepreneurs think the same I don't know that all investors think the same necessarily Firstly, so I actually see a lot of investors who will want to add that extra person until some numbers By the way, I agree with you at some point is just too much And I lost my train of thought for the second question. Sorry No, I think we're just talking about how you Restructured the board and how do you bring on new people and how do you migrate people off? But did you think about diversity when when building out your board and who were the best? Like what was the background of the best board members? You've seen an action. So as I said, we've our board has been pretty Pretty stable and we haven't really put that much effort into it. We're now thinking about it, you know Yeah, we have we have somebody from our seed round and then we added and recent horror Which in our sea round and and these are the board members and we're now going through that the tablet if you would I'm sorry, you were to Blank slate today. You were to design just pick your board members How many board what would be your ideal board size and who would you have on in terms of profile in terms of where you are right? Now and maybe you guys can both think of that as well. I think adding independence earlier on Would be the right thing like I'm happy that we have two investor board members But maybe balancing sat with two independence would be would be really good and I think you know So as a ratio, which we haven't mentioned yet this question of board control So maybe a question of figuring out the Figuring out the structure where you can add independence without giving away is a board control Which is not hard to do you know even well if you if you get the you can appoint those independence Then you can kick them off the board of replacement if they don't vote for you Sorry and to your earlier point I remember what I wanted to say apologies I think Sometimes companies that have the luxury to choose whether to give out a board seat or not What works pretty well is to give an observer seat and then not a lot changes a in terms of control and be you You have the optionality to see how the relationship goes with that particular observer So I've seen that work sometimes as well Yeah, I think just to echo the one of the comments there was that I think Sometimes it's too narrow just to think about boards being effective within board meetings or around board meetings We do a lot of work with our board outside of those meetings It depends on what we're doing as a company, but yeah, and we have a board member who's very good He's a former CTO so he has great product knowledge and our engineering team are spending a lot of time You know talking to him about stuff at the moment So I think you know, there's there's value there, but then also yeah, we have some board members who are you know, they're They're gonna be less helpful in those particular scenarios. We have an angel investor who's fantastic But has never founded and run a company before so, you know, we see we see both sides I think you're right. It's important to distinguish again between the board I think when we talk about the board we're talking about the people who are most involved in working with the founders And that doesn't always mean you have somebody that say has a board seat It could be some folks who are around the table who are involved who are angel investors Who are former entrepreneurs and so forth so so maybe share we've got a minute or two left your thoughts on How else is surround? You know as a founder how to surround yourself with the best help Yeah, again, I think it's about thinking It's about thinking about the dynamic of who you've got around the table And in terms of surrounding yourself by the best people I think generally the You know what we've seen is that the the best people to have on the board work for the best funds If you're raising from venture capital funds in terms of independence We haven't been through the process of impointing and independent at the moment, but again the connections in the exposure you get as an entrepreneur, you know A lot of that comes from your investors a lot of that comes from your you know Customers, etc. So it's that kind of ecosystem that you're building for yourself as a company and as co-founders. Okay, I Don't have to go far to find an example I mean Toby you're an angel investor in transfer wise and you haven't been on the board, but you've been incredibly helpful and you know We we definitely we thought about Our seed round was a view of how do we kind of have a 360 degree map and you know We need somebody with marketing somebody with banking somebody who knows us So we put that together in our seed round and actually we've been adding investors We've been adding individual investors pretty much in every round, you know, even in our last round We had we added individuals who didn't have to write big checks But they've taken people who are just going to be helpful and valuable to the business center And you know when a time when sort of time when marketing is important And you know we added Christian Wolf and then as an angel investor who was super helpful in some of the things and so on so Different topics at different times and you know, I I think the idea of letting people invest is really good because send the kind of Incentives are pretty well aligned as well Well on that note, thank you guys for for a great panel great discussion. Thank you