Yesterday, we had an initial board meeting of one of our recently added portfolio company.
First interaction always leaves the impression. Whether you are just met the founders for the first time, gave them a term sheet or conducted the first Board Meeting. It shows your attention to detail, willingness to share critical information, after all, prior to the board meeting asymmetry of information was completely skewed toward the founder.
VCs are marathon runners and from the day of an investment, the relationship between an entrepreneur and a VC is basically a marriage. From day one always every decision is based on mutual trust and transparency of information.
Below are few important topics I think it's important for a founder to keep in mind from the start:
Under-promise and over-achieve: budgeting is an excel-art, especially for an early stage company. Many assumptions are yet to proven and most likely things will go sideways, generally for the worse. Showing the company can deliver on its promises in a turbulent environment sets a good track record for further follow-ons.
Detailed next twelve months business roadmap: providing such a plan sets longer-term expectations up front, if you plan to invest more in the product next quarter, share your urgency to invest there now.
Set clear milestones until next meeting: apart from the broader picture going forward, it is important not to lose focus on most current key decisions needed to achieve. Quick wins drive motivation and during a multi-year run it requires a lot of them.
Engage with the board: members of the board represent the other side of the table. Many founders critique the VCs for not being as "smart" as they hoped them to be, by being pro-active sets the right pace for the VC.
Communicate new challenges: VCs invest in dozens of companies and sit on many boards. Most likely your problem has been addressed and solved before. The FIFO rule applies here.
Quote of the day:
Success has 1000 fathers and failure is an orphan (source)