Creating a Pre-Seed Board
At what point should a founder create their first Board? While some may disagree, I believe it’s never too early. Once a founder raises a pre-seed round, I recommend the following format:
2 common Directors (founders or a founder + trusted key employee)
1 preferred Director (the largest investor or an investor that the syndicate believes will add the most value)
Investment documents or a side letter will specify the term length of the preferred Director. At this stage, it is reasonable to assume the term should end once the next round is raised, at which point the Board would be reconfigured. If a pre-seed Director adds value, it is likely that a founder will want to keep them around, perhaps as an Observer, for awhile longer.
What if an early stage founder doesn’t want a formal Board yet? Another option is an Advisory Board:
2 founders
2 to 4 value-add investors or advisors
In either case, the Board serves as a forcing function for the founding team to pause and reflect upon what they have accomplished in the last 30 days and what critical objectives over the next 30 days will help them hit milestones for the next round. This early Board (whether formal or advisory) needs to roll up their sleeves and help with intros to customers, partners, and key hires. They need to ask the right questions and offer advice, while trusting the founding team to make their own decisions.
This monthly cadence of Board interactions at pre-seed sets the stage nicely for a founding team to raise their seed and effortlessly transition to a more formal governing board when the time is right.
