There Are Boards and There Are Boards

I have encounter startups who set up a Board of Directors with relatives and friends, who may be initial investors. This can be a dangerous practice if it continues to various growth stages of the company, for lack of knowledge or experience.

First off, with a startup, over time there can be one of three major type boards: Fiduciary, Advisory and what I refer to as Investors. The fiduciary board members have a clear definition with of what the directors’ responsibilities are, and ultimately are elected by the shareholders.