Ryan Westwood: The Boardroom Strategies No One Talks About

Business. Business. Business. Business.

Hi everyone. In this episode of Go-To-Market, I wanted to share something really special. In August, we had our annual conference, Go-To-Market Live at Fulcast. There, Ryan Westwood, CEO of Fulcast, gave a masterclass in how to work with boards. He answered two basic questions: How do I interact with my board members in my current role? And what do I need to become an effective board member in the future or currently? It's an amazing listen, and I hope you enjoy. It is my pleasure to introduce to you our CEO, Ryan Westwood, for the keynote address.

Thank you, Amy Cook. The secret is the team, not me. So happy to be here. So glad. Okay, so this keynote is going to be a little unorthodox. I'm not going to talk about sales. I'm not going to talk about marketing, and I'm not going to talk about RevOps at a Go-To-Market Alive event. But I am going to talk about something that I think is going to be really, really valuable to all of you. And something that is typically not covered, but is extremely, extremely valuable. Actually, when I think about my career, it's kind of one of the last things that I've figured out how to unlock. And so I want to share it with all of you. I don't know that I've even heard this topic covered as a keynote in any other setting. So, I'm really excited to go through this with all of you, and I hope it unlocks a lot of value in your career just this, just this hour. All right. So let's, let's dive in, Amy. Let's go to the next slide. Okay. So if whatever role you're in, whatever executive role, this is going to apply to you, whether it's CMO, COO, CRO, CEO, everything I cover will apply to you. So, um, I think, I genuinely believe that some of the things I'll talk about could change the trajectory of your entire career and unlock some, no matter where you're at in your career, this could make a significant difference. All right, let's go. Let's go. All right. Okay. So, There's two scenarios where this could help you. Either one, you want to be on boards in the future, or you want to understand how to align with the boards at the companies you work for. This is very difficult, and most things related to boards stay fairly unknown. There are many people that sit in executive roles who never really understand the inner workings of a board. And there are also many, many CEOs I know who do not get how the boards work. They don't know how to interact with them. They don't know when to interact with them, and they get railroaded by their boards. And I cannot tell you how many CEOs call me, and what they've done is they're sharing things with the board that are, um, that are really not for the board, and they create their own problem, and it starts to cave in on them. So, I'm going to talk about how you align and understand your board. And then also, I want you to understand the inner workings because many people in this room as executives that I trust and know, many of you will be on the boards of the future. And you, so you really want to understand these inner workings now so that you can be effective board members. I see a lot of people get on boards. They'll call me and then they're like, okay, what do I do now? I really don't get what just happened. So let's talk about it so that that doesn't happen to you. All right. So most of the time there are funding documents or documents with the business. There's bylaws. There's lots of different ways that you can call it depending upon the structure of the business. You either need shareholder approval, board approval, or both. Okay, for most things, the board, these are the decisions the board is typically involved in. So, let me ask you this question. If the CIO of the business, if Keith is ready to get a raise and they're at a board meeting and the CEO brings up that he, the CIO is going to get a $15K raise and they spend a half hour negotiating and discussing that. Was that what they should have spent the half an hour on? Whose fault is it that that came up in the board meeting? That happens a lot. CEOs, you are the CEO. You're the captain. The management team is yours. Those raises, those hires, those are yours. That is not a discussion you should ever have in a board meeting. That is something Keith is well worth that raise. You give him that raise and move on. It doesn't come up in a board meeting. Now, the decisions that do amending the certificate of incorporation. So that is basically changing the laws or the rules of how the business operates with investors. Another one. Now, mind you, I took this out of the personal documents of Full Cast and our funding. This is my personal document that I use to discuss things, and it's my way of knowing when to talk to the board and what I need approval for. So this is literally our documents. Nothing's been omitted or changed. So adopting bylaws. So the laws of the business, then electing. So if I wanted to just remove a board member or add a board member, I can't just do that on my own, right? I can't be like, you know what, I kind of don't like this lady. I'm going to add two other people and I kind of want a little more control. So I'm going to add a few more board members. You can't do that, right? That's something where I need votes and I need both stockholder approval and I need board approval. So, there's a lot of things that I need to be thinking about in that discussion. All right. Establishing a subsidiary. I can't just start spinning up companies under the company and then do whatever I want with those companies, right? I have people that I'm accountable to. Dilution or— Being able to dilute the cap table of the shareholders. I need approval for some of those things. Selling the company. I can't just go off and sell the business and then inform the board, "Hey, we sold the business. I hope you're happy," right? So, these are the types of things that I need to discuss with the board, or you would. Identifying, identification. So, making sure risks, things that, you know, sometimes there's insurance related to being on a board. Approvals for certain transactions. That could be a loan. I can't go out and take a $100 million loan and then let everybody know after, hey, we've got $100 million in debt, right? But you— I'm saying this, and some of this might seem absurd. This stuff happens every day. There are CEOs that go out and take a $10 million loan and then a week later show up at the board meeting and inform the board, and then they freak out. And then the, you, you start wondering why the board and the CEO aren't doing so well. These things actually happen quite frequently. Now, adoption of amendments. If I'm going to issue stock options or create more stock, I can't just, I'm not the federal government. I can't just create more money. Okay. I can't just create more stock. I have to get approvals and work that out. All right. So I'll leave this slide. You can take a photograph of this slide. But I just wanted to give you a taste for these are the actual discussions you're having on the board level. These are the things that you need approval for. Should I be discussing the inside sales team and conversion rates? Right. Fairly unlikely that that's a discussion I need to be having in a board meeting. There are potentially times that will come up, but this is the main stuff that you're getting votes for. And the primary things or decisions boards are making. Okay? So this is, I don't think this is something that's typically showed or disclosed, but I want you to see that. And, you know, you can even take a photograph of that. I don't think it's anything too specific to Fulcast. It's probably the same or similar in all of your companies. All right. Okay. So, Let's talk dynamics. Size of board. I remember showing up to a company where the CEO told me it was a, it was a consumer products company, $70 million in revenue, 13 board members, 13 board members. Your CEO, if you, if you look at now, I'm going to say this too. If you look at boards, you can, if you understand the dynamic of the board, you could learn more than sitting for 4 hours talking to the CEO and the executive team about the company. I'm going to help you see how you can look at a board and understand more than you need to know about the dynamics of the business, the culture, and what is going on than ever meeting with anyone at the company. So we're going to walk through some of that. So dynamics. If you've got a small board, you can move very, very quickly and the executives the CEO is probably far more likely to be managing the business than the board. I had a mentee and a gentleman named Ryan Northington that worked for me at our last Business Simplice. Promoted him to be the CEO after I left. When he— he's now off running another business as a CEO. He called me and he's like, I'm exhausted. The amount of time I spent managing the board, I had no clue. That you spent that much time managing the board. So one of the things you have to understand about your CEO is they're spending a significant amount of time managing those shareholders. Now, why would they have to do that? I just showed you all the decisions they can't make without their approval. So you really— they have to know their board members. They have to be working and informing the board members and disclosing information. So if I want to acquire Epsta, I have to get board approval. So I have to have been spending more time with my board. But the Fullcast board is a board of 3. So if you're like, why is this company moving so fast? Well, I don't have a lot of people on the board that I'm spending time with. We are making fast decisions. Okay, so the other 2 board members, one, Isaac, and Kent Madsen, and we move fast, right? At that company I described to you with 13 board members, how many big decisions or acquisitions do you think they've made? Nothing's happening. Okay, so what do you learn from that? The size of board might indicate the speed of the company. So that's one thing you can see from the outside immediately about what's going on within the business. Okay. Now, you, if you see a board of 6, 4, or 2, they don't know what they're doing because there's no majority. So, when you, I will have, this has probably come up 3 or 4 times this year. CEO gets on the phone with me. How many board seats do you have? Uh, 6. I'm like, oh, immediately what goes through my mind is it's not a real board. They don't, nobody knows that they could lock up 3-3 and no one's thought about it. Like that is actually really common. So you, those are like little cues that you don't want to go work for that company because they probably don't actually know what they're doing. And you might want to like remind them that they need one more board member. All right. So, uh, what's the difference between the board chair and the CEO? For a long, long time, CEOs were the chairs almost always. There's a continuing trend where those roles have become very separate and your chair is typically responsible for managing the board and the board members and the votes versus the CEO. And for governance reasons, that's become more and more common because it's perceived as better governance and accountability for the CEO in the business to have a board chair. Now, sometimes they're the same, sometimes they're not, but it's really, really important to understand who the board chair is because they're the captain on the board, not the CEO. So, you might, you know, talk to the CEO and think, okay, the CEO runs this and runs these board meetings, and it's very likely they don't. It's actually the board chair. So, understand on the board who sits in that chair seat. All right, board observers. Now, there's a very big difference between a board director and a board observer. Does anybody know, uh, what the difference is between those roles? The main difference? That's right. So the nomenclature isn't that much different, but it's actually super important. Usually a board observer is because a private equity person or a venture capital partner doesn't want to take notes in the meeting. So what happens is, is you'll have someone real senior show up and then someone who's, you know, much younger show up sitting next to them and they're taking notes and they're called a board observer. A lot of times they're not even sitting at the main table, but they're there gathering information. They may sub in or inform the board member, but they do not have a vote on anything in the company's operations. So another thing to know when you get into a board meeting or you get called in: who are the directors, who is the chair, and who are the observers? You want to focus on the directors. Observers are great, but directors make decisions in the business. All right, independent board members. Now there's a lot of dynamics here. Typically on a board, you have, you have board members that represent the common shareholders. Common shareholders are typically representing the employees, right? Preferred shareholders are typically representing the investors. And then independent are typically people that are former executives or people that are experts in the industry. If I'm in healthcare, I've got a healthcare expert or I've got a SaaS expert or I've got a sales expert. Those are your independent directors. Now, some businesses won't have any independence. Some will. I love the idea when they have independence because what it means is you have former operators sitting on the board. If you have no independence, typically what you have is a lot of investors sitting on the board. I have seen boards where seed, Series A, Series B investors that are younger have plugged up the board and it's actually can be very scary, the advice they give because you can have a bunch of, and I love my investors and my investor community. I'll always give them their, their support. But I have to say, it can be scary when you have a bunch of people that have never operated a business. Think about this. If you're at a venture capital firm of 13, and your CEO's 150 and you're in their ear, he or she's ear about how to operate the company, that dynamic can get out of control fast. And if you're a young CEO, a lot of times you will listen and oversubscribe to what they're saying. And if you've ever seen businesses where you're like, man, they have made some really bad decisions, I can't believe how bad these decisions are. A lot of times it's 'cause there's a young CEO who thinks this, director at a firm of 13 is brilliant and is listening. And it's really, really bad. And so, one of the things that I'm always trying to talk to CEOs about is be very, very careful, even if they're direct on the board, take their advice, but you have to call the shots. You're the CEO and you've got to make the hard decisions. So, you want to look for companies where the board may have more executives like yourself because it gives you some comfort that the decisions that are being made on a day-to-day basis, there's at least somebody who's going to raise their hand and say, hey, Mr. Investor, that was a great idea, but it's nuts. It doesn't apply at all. And someone's got to be able to call it out and say it. And so you've got to have those types of people on the board. So look for independent board members. Now, sometimes you'll see non-executive or executive. All that's indicating is that if it's executive, that means it's someone on the management team who's also on the board. Non-executive, meaning I've joined the board, but I have no executive day-to-day role. But that's the— a lot of times you will see that nomenclature as well. Board committees. Now, there's typically 3 primary. There's a compensation, there's audit, an audit committee, and then there's kind of a committee that helps with just hiring and different decision-making. The most common are audit and compensation committees. So on a board, if your CEO says, okay, now I'm going to pay myself $700,000 a year, that doesn't work. They have a compensation committee and that committee will help them make the decision on compensation for the CEO, or specifically for the CEO, usually. That's the most common that the compensation committee is over. You had some recent, a really recent kind of cool scenario for me to see roll out. Elon Musk had a board. The board said, I think it was $55 billion or something. What was the total number? Okay, $29 billion. So, they said if you hit this wild metric, and it was tied to the stock price of Tesla, you get this massive amount of money. Most people in the room were like, if he hits this, that's nuts. We'll pay him the money. It's a crazy number. He'll never hit it. We hear all the stories. He slept in the factory. He did whatever it took. He got there. He got to the number, right? And then what happened? There was all this controversy that too many people on the board were insiders. That his brother was on the board, like my brother on our board. And they— and, and it happened to be that he voted for his package. Right. And in Delaware, they said, guess what? We're not paying him. So Delaware is widely seen as the place to set up your business for the laws. Since then, there's been a backlash and a lot of CEOs have moved their companies to Texas. There's even now in Texas, they're starting their own stock exchange. They're moving in there because the laws are becoming more advantageous. Right. And so there's all this controversy. So the dynamic of the board and how it's set up can create some of these problems for you. Right. But the compensation committee is really important. Then the audit committee. Now, most young CEOs that I know get worried about having their financials audited. I love having them audited. Let me tell you why. Because every year a third-party audit firm says these are the financials and they hand them out to everybody. And it's like this insurance policy that makes me sleep well at night. Because the last thing I want is somebody to say, oh, Ryan, those numbers aren't right. You, you know, you made a mistake or someone internally did something. I'm like, That stresses me out. I want, I want Ernst Young to put a stamp of approval and send that out to my investors. If that didn't happen, I'd be freaking out because there's too much risk. But I see all the time young CEOs, they avoid it. Many venture— it's not always required, and a lot of venture firms do not require audited financials. This is something you would very rarely hear about. Even on the management team or as an employee. I would not go work for companies without audited financials. If they're not audited, the risk of issues or problems is really, really high. And actually, I would say in venture-backed companies, this is very common and actually probably more common than uncommon that they don't have audited financials. So this is an interesting question to ask. And it's not, it's not even like, hey, I need to review your audited financials. Just tell me you have them. Because then I know the, the liability and the problem financial crimes are highly less likely to occur. Okay. But the audit committee will approve those financials. And that's another really kind of key component of the board that you want to make sure is happening. All right. Okay. So, then you have board members that represent funds. Here's something that is typically unknown. The board member is only there representing the fund. So, I've had, I had a situation where I chaired a board of a healthcare software company in Australia. The fellow for the fund passed away. And when he passed away, the new guy who came in was wreaking havoc. And I was the board chair and he was really difficult. He would berate the CEO in the meetings and typically to a place that was so corrosive that I got uncomfortable and actually had to stand up and leave a board meeting because of the way he treated him. Then I had to fill out third-party surveys with the fund and work out how to get a new board member. So, one of the things, it's the responsibility of the board chair. So, if your CEO's always saying, 'Oh, this board member is doing this,' or 'This board member's giving me a hard time with this.' The board chair's responsibility is to make sure that it's a high-functioning board, just like the CEO's responsibility to remove someone from the management team if they're being corrosive, right? So that's another dynamic is the fund will assign someone, but that person could change. Even if they quit, a new board member could show up from the fund. They're representing the fund, not themselves. So that's another dynamic to be aware of. All right. Okay. So, um, I now want to go through some scenarios. Let's go through live scenarios as if we were doing a Harvard case study. I want you to think about this. You've now just Googled this company. You— up comes their website and up comes the board. We're going to go through 4 scenarios and then we're going to talk about what is really going on in the company without ever talking to a soul. Without ever watching a video, without looking at a press release, what is happening in the business? All right. Okay. So this board, you have 13 board members, 6 are VCs. Give me some ideas on what's happening probably in the company. Okay. Very slow. Yep. Yeah. What do you think the CEO is working on? People are probably having a hard time getting a one-on-one with the CEO. 13 board members is pretty painful, right? Okay. So, and if there's 6 that are VCs, there's another dynamic here that's really painful. Here's what nobody talks about when they, with venture capital that is rarely understood. I'm a seed VC. I'm a VC that does the seed round. I'm super pumped. I got in at a $10 million valuation. I'm the VC who did the A round. I'm super pumped. I got in at a $50 valuation. I'm the VC who got in in the B round and at $100. I'm the VC who got in at $200 in the Series C. What do I have as a dynamic now? We just got an offer to buy the company for $300 million. Who's mad? Who's happy? But the CEO's like, they're the nicest people in the world. But now hundreds of millions of dollars are at stake. So now the investor in the Series C, what do they want to happen on that acquisition? They're freaking out trying to shut that thing down and they're yelling at the CEO. This happened to me. You're taking crazy pills. So my Series C investor who later claimed it was their idea. Told me I was taking crazy pills and it was because it was 9 months after they invested and it was 2.7 times their money and they felt like they could get 10. They were like, we're riding this thing to the moon. You're at 70% growth on $100 million. You know, those types of conversations are happening. So now it does not matter how great these humans are. Now they represent their funds. Now we have a spreaded interest. So if you have 6 VCs, you better bet the CEO, not only are they dealing with all the decisions I just showed up there, they're dealing with people in their ear. The seed investor is in their ear being like, sell, sell, sell. And why are they saying that? They got in at 10. That's 30 times their money. They're like, they're going to be high-fiving. They're going to be You know how many more people are going to give money? They're thinking, I'm raising a whole fund on this guy. I'm going to raise another $100 million and I'm going to get my 2 and 20. I'm going to get 2% of that. That's $2 million in my pocket. That's what's going through their heads. But that late-stage investor is shutting it down. Go ahead. Do they get money up and, you know, to bring everyone in, or do they owe their shares? In that case, you're Series C, yes. Are fewer shares than earlier? Such a good question. All right, so this dynamic is different in every company. So if you— typically the latest rounds are considered the, uh, top of the, the capital stack. So if you're later in, you, you will supersede the earlier investors. Depending on each round, your CEO could negotiate different terms. Here's the dirty secret. I feel like I'm outing all these people. So I genuinely have these moments where I'm like, I am outing people. So, uh, what happens is they will celebrate with everyone and pump their fists, the CEO and everybody about the valuation. And they're like, hey, I got a billion-dollar valuation, but they have this thing called a preference stack and liquid— and liquidation preferences. And they may have got it what's called the 3x liquidation preference, which basically means the venture investor gave the CEO what he wanted optically. But the reality is, is it's about a third of that. It's just nobody knows. So here's the thing. VCs are sophisticated. They understand the game. Think about it. Entrepreneurs, you'll raise a round every 10 years if you're lucky in your life, or it might be the only one you ever raise. Right. How many does an investor do? If I'm a seed investor, I might have done 30 that year. I'm going to kick that entrepreneur's butt if that entrepreneur doesn't have the greatest lawyer and understand what's going on. So to answer your question, what will happen is some of them will put blockers in place. So what they'll say is, yeah, you can sell the business as long as it crosses this threshold. And I have a unilateral blocker independent of the board decision. So then everyone's like, oh, well, the board could have control to make decision. No, there's one person. And that Series C investor has a 3x blocker, right? What that means is 3x the valuation they invested at, anything under that, they'll block it. So then you find out the company was going to get purchased and you're like, why is our CEO nuts? He was going to make $50 million. Why didn't he take the offer? Here's why he didn't really have a choice. That Series C investors called him and said, I'm blocking your transaction. So that happens all the time. And so the CEO isn't going to say, hey, um, 1,000 people hate this one person. You all would have made a ton of money and wiped your tears with dollar bills. But guess what? This person blocked it. You, that, that's not going to happen typically, right? So yes, you have sometimes unorthodox things like that, blockers, unilateral blockers. Sometimes you have certain share classes who have certain rights that can block a transaction. And without them, you can't move forward, even if you get all the board votes. So this is what I always tell investors, and this is what I love. Vanilla terms. I like vanilla venturecapital.org vanilla terms, because guess what? I don't want it. I don't want these weird different legal situations coming up as I'm trying to build the business. I want to make the best decisions for everyone. And so vanilla terms is what I like. I've had a few investors say, well, if you like vanilla, we're not your investors. I mean, you're, you're exactly right. You're not my investor. So, but what that means typically is that I have to go through and pitch more often, and I have to go through a lot more funds because I'm very, very choosy about the funds I will or won't work with. But I like vanilla terms. There's a lot of investors out there that understand that and that do invest at vanilla terms. Venture capitalists can get a really bad rap, and a lot of it is CEOs not understanding how those firms work. Getting excited about dollar bills and making abrupt decisions. A lot of times it's really the CEO's fault, not their, not their fault. All right. Keep moving. Let's go. All right. So this scenario, you have the CEO has been hired. It's a PE group and there's 7 board members, 2 founders, 3 from the fund and 2 independents. What do you think's going on? Yeah. PE firm's in charge. CEO's not in charge. Okay, so CEO doesn't, uh, is not in charge in this board. Another big dynamic. This CEO's probably got like 24 months. Okay. So you're, you're spending all this time aligning with this CEO. You're like, man, this CEO's gonna know I'm the best. I'm, I'm gonna align with them. Uh, be careful. They might be there 18 to 24 months. Okay. So is this a CEO you wanna bet everything the house on? Probably not. Uh, who, who do you want to make sure you've aligned to? The private equity firm, right? Okay. So, uh, I, uh, because of time, we'll keep moving. All right. We on scenario 3 here, Amy Cook. Yeah. Venture-backed founder-led, 2 VCs, 3 founders. What's going on here? Your alliance, the originals, is true about— no reason why. Active or not. Yeah. Company. So your due diligence on the founders— if you have a crazy person as a founder, this is a really, really scary environment because no, they don't have checks and balances. They're in control, right? So now you're betting on a leader. Now the reverse to that is if it's a really great founder, this is going to be the best company culture. And no matter what anybody says, if you really like the CEO and you meet them and this is the structure, it's probably going to be a really fun company to work at. The other thing is it's probably going to move really, really fast and a lot of decisions are going to be made fast. Now, what's the downside in this scenario? Okay, so here's the psychological element to this. In this scenario where the private equity firm is the majority, if you run out of money, what's going to happen? Private equity firms going to fund it. They're going to add more money, right? And they're going to do a bunch of cutbacks and reduce staff. In the scenario with the venture, the biggest risk that you have is the founder runs out of money and can't raise more money because the investors are like, well, they're the majority, let it burn. Right? So, a lot of times in venture, they'll make 30 shots and they'll expect 3 to go to the moon. And if you're under 100% growth and you're at a certain revenue range and you run out of money, they might just walk away and let that thing go down. Okay, so these are the dynamics from the board. You just looked at just like one slide with a few things, and you, you literally know 90% of what you know about working at that company without ever speaking to one person in that scenario. Okay, scenario 4, a public company. Two activist investors just joined the board. 7-person board, CEO, CFO, 3 independents. What's going on? Yeah, you got that, Jim. Uh, okay. Activists don't join boards unless they are going to be activists. They want to change something. What they did is an analyst at their firm saw something in the financials they didn't like. They don't think the CEO or the management team is doing a good enough job. So what they do is they buy up the stock quietly. Then they force their way and they do usually a PR campaign and they force their way onto the board. This just happened here in Utah to a very close friend of mine. He was running and operating a business called Overstock. Then what happened is he made this incredible move and he bought the Bed Bath Beyond brand for pennies on the dollar. And obviously that had had a bankruptcy, but that brand and that website and just, just the, the overall value of knowing that brand and the sales that were picked up from it. He made this incredible move. The stock surged and an activist firm in New York decided that they were going to, they were going to buy up a bunch of stock. They put a bunch of people on the board and my friend of 20 years got fired from his role on the board, got pushed off the board. Okay. Credible operator, uh, and what happened is they put someone else in the place and hijacked the whole company. So if two activists come on now, they— this happened to Salesforce, and all of a sudden Salesforce went from break-even to printing money like an ATM machine. How did Marc fight them off? The way he fought them off is he gave them what they wanted, and when a bunch of EBITDA came, the price surged. And then they sold their stock. All they want is the stock to bump to sell, and then they leave. They are just pure capitalists. So, in that situation, you should be very, very thoughtful about what is happening in the business. It could be very disruptive, but you need to listen to the calls and find out what they want. Do they want more EBITDA? Do they think that a bunch of people need to go? Whatever it is. In this scenario, it's highly likely the CEO is going to be fired. Soon as you hear the activists come in, there's going to be either an EBITDA issue, a growth issue, or someone's getting fired. All right. Okay. Um, I've said this a few times. It— this is really counterintuitive and bizarre, but this is more, uh, helpful than even talking to the leaders of the business. Looking at the board. All right. Okay. Now, I'm going to tell you really quick, if you get asked to go to a board meeting, please do this for me. Nothing is more agitating to me than when I'm sitting in a board meeting. I've been an operator now for 20 years. I can see things in the KPIs. I make correlations. It's all I've been doing for 20 years. Obsessed with this. You think you're super clever and there's a super big problem in the business and you show up and you don't disclose it. We'll find it and you will look so, so bad because what you look like is either incompetent or dishonest. I'm telling you, bad news never gets better with time. If there's bad news, just disclose, disclose, disclose and share it and you'll be shocked how well it will go if you come with a solution. Just the best thing you can possibly do is disclose the issues. And follow it with the solution right away. I've never seen anybody get blown out of a board meeting in the hundreds of board meetings I've attended that just disclose the bad news and then go into the solution. But what I have seen, I had a CRO jump into a meeting, uh, pipeline was way, way down. I asked for the conversion rate immediately. I saw that the conversion rate, uh, was low. We saw the close rate was high. I asked for it by rep. What we, what we realized is 4 reps had really, really super high close rates and really, really low conversion rates. What's going on? They're not putting anything in the CRM, right? Nothing's going into the pipeline. So the CRO isn't managing those reps. And in seconds, I could see what's going on. But the CRO just didn't want to say a word about any of it, right? Was trying to just gloss over it. If you have sophisticated operators who've been in your job for a lot of years, they know what's happening. They've been through the same thing. They've showed up at a board meeting afraid to share bad news too. So just disclose it and show solutions and show that you're competent and you have ideas and you know what you're doing. And then at the end, ask them. So say, here are the solutions I think, what do you think? That's super valuable use of a board is then ask them what they're thinking and just be quiet and listen. Don't show up and throw up at that point. Just listen and be quiet and try to get help with your problem. Crowdsource your problem. All right. Okay. Now, here's the biggest hack of the whole meeting that I hope is very valuable to you. If you want to circumvent the whole system Right now, the dollars going into venture capital and private equity firms are flat or down. So, they're desperate for money. Private equity firms are doing funny stuff. If you read Financial Times, it's actually, I think, a bit scary. They're selling their own businesses to their own funds. So, some of the private equity firms, the giants lately, they're selling the business from one fund to the next fund, to their own fund. What's the problem with that? The prior fund is either going to lose or the new fund's going to lose. They're hosing one set of their investors no matter what. It's really hard for them to walk that line. But this is some of the most reputable private equity firms, Vista, Thoma Bravo. They're selling to themselves their companies. They're trying to get liquidity. Why are they trying to get liquidity? Because they need investors to invest money. So right now is the opportunity where they may take your check at like $25K. So if you could, all you can do is just not take a vacation this year or not buy that car, that watch, or ask your CEO for a bonus to hit a crazy metric. Just $25K. $25K. You could literally alter your entire career and change the trajectory in a very significant way. And let me tell you why. As soon as you become an LP, you now have a dialogue with the board member, right? Now the board member and you are a one-to-one because that board member at that venture private equity firm, now you're their boss because guess what? You gave them money. Now guess what? You get to say, how's the fund doing? How are those investments going? Right? Now you have a dialogue that has nothing to do with you being accountable to them as a board member. You now just stepped aside and put yourself up here in the eyes of the board. You show up for an update, you're like, okay, so I'm the CRO, I get on the update. Oh, by the way, I'm an LP in your fund. Boom. Right now, you just elevated yourself because what are they thinking in their heads? This person's had some success. This person has a little bit of money. This person is obviously at a different level in their career. We had a call with our investors last week and our head of customer success, Mitch McFarland, he got on to present and he was talking about NRR. And the first thing he said is, oh, hey guys, this is at Companion in Boston. I'm an LP in Fund 5. The whole room's like, oh, anything else he says, he's good. Right? So, you want to be an LP in these funds and the entrance to this world is different. Now, what is the most qualified networking room in the world? An annual meeting for a fund. If you want to put yourself in a different room, you show up at the fund and the net average net worth of someone who invests in a venture private equity firm is $1 to $30 million. Okay? So guess what? No one's in the room with a net worth under $1 million. To be a qualified investor, you have to at least made $200K or have a net worth of $1 million. Okay. So that's the one gate, right? So if you're sitting in a room where the minimum net worth is $1 million, is that a good room to put yourself in? Holy cow. That is the hack. You just, you could stop going to all other networking events for the year, go to that one, and I promise you it will be a game changer. And then you're sitting in a room with a bunch of people who all they do is make decisions on the boards where you want a job. Now, to optimize, private equity firms are, when you get to know a member on the fund that are private equity firm, they have less portfolio companies, so they'll typically have less management teams they're working with. Venture capital is going to be the people that you want to get to know the most on a board because they may be on 30 boards. So why would you want to get to know someone who sits on 30 boards? How often do you think people are asking them, hey, who's a really good CRO? Probably ad nauseam. So you're over there worried about the CEO. And I'm just going to be frank with you. The CEO is maybe fourth best person to worry about aligning with for your career. Again, I'm outing myself. So let me tell you why. At a venture fund, you really want to align because they have more connections than anybody. A private equity fund has the second most connections and the independent director on the board has the third. And usually the CEO is the fourth. So, you really, really want to make sure that you're aligning with those individuals and that you're in the room at the annual meetings with the people who are making— calling the shots in the business world right now. They're at those meetings. You also establish different credibility. All right. Now, do whatever it takes to get access to the board deck. That's my last piece of advice. If, um, so Amy, how many years have you been helping with board decks? And tell everybody, just tell them a little bit about that. So, so 13 years Amy has done it. And anytime I've said, hey, we could have somebody else do this or do that, what's your response? Absolutely not. You don't need to. You know my business better than anybody. So, uh, Amy always knows what's going on. Amy Cook was our CMO. She's now my co-founder, right? She always knows what to align to. She knows what the board cares about. She knows what's going on in the business. If, if you're burdened by updating some KPIs or helping an executive or being the executive, you should not feel that way. You are getting what's really going on in the business and what you should be doing is looking at that. And thinking, how do I align to these things? It's a game changer. You might see a slide where they're like, hey, we're going to make a shift here. I would volunteer yourself right away to that project and then go all in and get the credibility from crushing it in that project. Okay. And figure that out. All right. So, thank you, everybody. I appreciate just all of you being here, genuinely appreciate it. And I hope you've unlocked some insights today. Have a great day.