Earlier this month, we held an educational event featuring two panels with our global sponsor Wilson Sonsini Goodrich & Rosati at their lovely downtown San Francisco offices. During the event, we discussed the role of the independent director on private and public company boards.
Below are 5 tips from our Private Board panelists Peter Clarke (Talent Partner, Accel Partners), Anne Dwane (Co-Founder & Partner, Village Global), Karla Martin (COO, InspiredLuxe), and Donna Petkanics (Corporate Partner, Wilson Sonsini Goodrich & Rosati).
1. How do I find a board position?
“You need to be known for something. It doesn’t have to be startup-y. It doesn’t work to say I want to be on a board; that’s not a skill or capability. It’s really good to be intellectually promiscuous. Talking with CEOs about their challenges, digging in and chewing on it without expecting tit for tat. When there’s overlap of your interests and their challenges, that opens opportunities. Think about where you can help them the most, where you add the most value to the founder.” — Karla Martin
2. When do independent board spots open up in a company’s lifecycle?
“Independent board spots typically open up at term sheet stage. Usually one of the most negotiated parts is board — who gets seats, who controls who gets on. Often seat sits vacant. Everyone who sits on board is a voting member.” — Donna Petkanics
3. What is typical compensation for a private board member?
“Compensation is typically no cash, all equity and expenses. We usually see 0.25 for early stage, 2 year vest with no cliff. You should expect to be a board member for at least 2 years.” — Peter Clarke
4. Should you negotiate your board compensation?
“There’s too much hush-hush around board compensation. When you get on board, work with the company on making sure your compensation is equal and fair.” — Anne Dwane
5. What about conflicts of interest?
“You shouldn’t sit on a competitive company’s board. If you have a conflict with a specific deal, you can always recuse yourself on those discussions.” — Donna Petkanics
“Also, ask your employer before you start talking to boards if there’s any potential conflict.” — Anne Dwane