New VC-InsideOut Podcast: Best Practices for Building High-Performance Boards During Challenging Times




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We have some engaging and topical new content on our VC-InsideOut podcast program– Episode 7 in our Governance Series, "Best Practices for the High-Performance Board".  This is a first for VC InsideOut as we recorded a live, 92 minute program at the Pillsbury Winthrop law firm this past Thursday morning.

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Danial_FaizullabhoyChris_RustPascal-65
Allison Leopold Tilley, Danial Faizullabhoy, Chris Rust, Pascal Levensohn 

The panel consisted of Chris Rust, General Partner of US Venture Partners, who sits on the board of Akros Silicon with me, Danial Faizullabhoy, CEO of Broadlogic, which is one of the Levensohn Venture Partners portfolio companies, and Allison Leopold Tilley, who has worked as outside counsel to an LVP company as far back as 1997.  We had an engaging and candid conversation, which included fielding questions from audience members including Laurie Yoler, Managing Director of GrowthPoint Technology Partners.  The perspectives from our panelists were all the more rich because Chris is a former CEO who is now a venture capitalist, and Danial is a former venture capitalist who is now a CEO.     

Some of the highlights, from my perspective, were our discussion of common board conflicts given the very different perspectives of venture capitalists from CEO's– specifically, VC's cite "Personality Conflicts" as the most common conflicts on venture boards, whereas CEO's point to "Valuations" and don't even recognize Personality Conflicts as a category.

We reviewed director legal responsibilities and fiduciary duties and noted some common board misalignments:

SOME COMMON EXAMPLES OF BOARD MISALIGNMENT

Economic
In VC backed companies, different preferences can make for strange alliances

Fiduciary
Violations
of fiduciary duty



Strategic
How
do you spell independent?



Ego
Too
often emotion clouds decision making

    
We closed the session commenting on current events and best practices to achieve board alignment during the current crisis, especially given the high probability of fragmented co-investor syndicates in venture companies and the real-time significant revisions of operating plans for 2009 that many companies are experiencing:

BEST BOARD PRACTICES DURING THE ECONOMIC CRISIS
Process,
process, process…
Ask, and answer,
the hard questions early
Be realistic
about your operating forecasts and be prepared to revise them – up or down
Put yourself in
the other directors’ shoes
Be open to
working with outside consultants to address team and other management issues
Be creative when
considering solutions
The sky is not
falling– don’t panic yourself into a self-fulfilling downward spiral!
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