“Many entrepreneurs think they don’t need a board — that it’s a waste of time — but having a bunch of smart, experienced people giving you input is a gift from heaven,” Adrian Gore, founder and group CEO of Discovery said in a 2014 interview.
Gore credits his own board for where Discovery is today, he is also known to share his wisdom with entrepreneurs as a board member of Endeavor South Africa, an organisation that identifies and supports high-impact entrepreneurs.
One startup that is benefiting from having a dedicated board of directors is cloud-based ticketing solution, Quicket.
The Cape Town-based company found itself in the process of having to set one up after securing an investment deal with KNF Ventures.
The deal not only meant a capital injection for the startup, but also meant their investors would be on hand to add strategic value to the business as well as mentorship.
“We are extremely excited to have the experience of KNF’s investor base and Knife Capital‘s track record of accelerating the growth of local SMEs on board,” says James Hedley, Quicket co-founder and director in a press release.
Quicket founders, Michael Kennedy, James Tagg, and
The process also meant the founders had to confront one of the biggest challenges that startups often face when it comes to having a board. Making the transition from being 100% independent and making their own decisions to now having to consult a board on major business decisions.
Although the process did require some adjustment, Hedley says they do not see it as a disadvantage.
“There definitely will be more oversight over the decisions that get made. And so we won’t have quite as much freedom but from our experience working with KNF, I don’t foresee it being a hindrance to our operations. I think if anything it’s going to be more of a guiding force for Quicket and probably prevent us from making costly mistakes we might have otherwise made,” Hedley says.
Hedley shares with SME South Africa Quicket’s journey to setting up a board and how the startup founder balances their wants with the investors’.
Getting investment and board-ready was a long journey for us
We had to do a full due diligence process where they covered everything from operations, there was a technical aspect to it, legal, financial, marketing etc. basically they look at every aspect of the business and highlight any areas that could be a problem and basically do a full invest-assessment of the business. Based on that they decide if they are going to proceed with the investment and they also give us a list of recommendations and changes they need to see in order for the investment to go ahead.
We now have help seeing around corners
The biggest advantage [to having a board] is the wealth of expertise they bring to our company. Collectively they have got far more experience running different businesses than we do. They’ve seen and encountered a large number of problems and have dealt with a number of things that we haven’t necessarily dealt with in running very big businesses.
So that is obviously hugely valuable to us as a company because it allows us to go ahead without making the kind of mistakes that a newer and inexperienced business would.
The biggest gains have been with financing, experience and building networks
The nice thing with Knife Capital is that they are very involved but not in an overbearing way. They bring three key things – knowledge, network and finance. So finance is just part of what they bring to the table, the knowledge and the network that they bring is also incredibly valuable. We have already begun to reap the benefits that come with that.
A shared vision is critical, but so is being flexible
I think we were very clear about what our vision was in the beginning and we approached them with our vision as a reason for them giving us funding. So I think we’ve been on agreement on our vision from the outset.
With that said, if it makes business sense and if it makes practical sense, there’s no reason that as a company we are going to necessarily be bound to a vision that no longer works. And so, if Knife Capital were to tell us that they thought we were making a mistake or that they didn’t agree with us, that would be a discussion we would have on a board level and ultimately come to some kind of consensus around what we want to do.
Every entrepreneur should know this about getting a board
I think in the early days, when you are very much in the seed stage, year one, it does make sense to be as agile as possible. In that it’s probably an advantage not to have a board that’s going to add a lot of time and difficulty to the decision-making process in the early days. That said, however, I think as the company grows it becomes very necessary to get some experienced people to help you manage it.
Business owners should be very selective about who they have on their board. They need to have a good relationship with them. They need to make sure that they share a vision, have a common understanding for the company’s future, and they should lay out and definitely hash out before they even consider going into business further.