Directors for startups: boon or bane?

HOW often does an entrepreneur, who is firing on all cylinders to make the business a success, have the foresight and capacity to set up a board? There is a common perception that a committee of advisors or board of directors will slow down the speed that the start-up can innovate and progress. Regardless, once a private equity or venture capitalist (VC) has stakes in the business, it is inevitable that formal board representation is expected.

This highlights the stark difference between the perceived value of directors, especially independent directors, to entrepreneurs and corporate investors. The benefits of having independent directors on boards, such as adherence to corporate governance and diversity of expertise and perspectives, have been acknowledged, and the same benefits apply to startups.

Making it work mutually