Keith RaboisManaging Director, Khosla Ventures

Construct a Board of Directors Early - Keith Rabois

Name: Construct a Board of Directors Early - Keith Rabois
Uploaded: 2020-08-24T07:00:01+00:00
Duration: 1 min 29 s
Channel: Keith Rabois
Description: In this monologue, Keith Rabois argues that establishing a formal board of directors as early as possible is one of the most effective ways for a startup…

24 Aug 2020 · 1 min

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In this monologue, Keith Rabois argues that establishing a formal board of directors as early as possible is one of the most effective ways for a startup to avoid self‑inflicted mistakes that dramatically lower the odds of success. He explains that many early‑stage failures stem from avoidable errors, and surrounding founders with seasoned, high‑caliber advisors can help prevent them. Rabois recommends populating the board with people the founders wish they could hire—individuals who are currently unavailable for full‑time roles but can contribute strategic guidance. He cites his own experience at Square, where he and Jack Dorsey assembled an accomplished board even when the company was very small. Rabois also stresses the discipline of preparing regular (typically monthly) board decks; the preparation process itself surfaces hidden issues and forces founders to clarify the company’s true state, delivering learning regardless of the board’s feedback. Overall, the talk emphasizes proactive governance, strategic advisor selection, and rigorous preparation as key levers for early‑stage companies to improve their odds of success.

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I'm a major proponent of constructing a formal board of directors as early as possible in a company's trajectory. I know this is somewhat controversial, but to me, the most important thing you can do when you're an early stage company is avoid making unnecessary mistakes. Building a company from scratch to taking over an industry is very counterintuitive, and a lot of wounds are self-inflicted, and the prospects for company success that are, you know, widely regarded as one to 10%, I think are mostly a function of self-inflicted wounds. So what I tend to do is prefer surrounding myself with people who who can help me avoid unnecessary mistakes. One of the best ways to do that is to construct a board of directors. One of the best ways to fill the board of directors is to find the people that you wish you could hire, but that are points in positions in their lives where it's not really feasible. So surround yourself with the very best people you can find. This is the strategy that Jack Dorsey and I used at Square. We had a very talented, very accomplished board, even from the time we were a very small company. I think the preparation for board meetings is a great process for discovering and focusing on what's actually going on underneath the hood of a company. And even if the board members themselves aren't providing useful feedback, the process of preparing, the discipline of preparing on a regular pace, I'd say monthly in the early stages of a company, is really instructive. I found when I was preparing my board decks that I would always, without fail, learn some interesting things in getting ready and preparing for my board meetings.