Video instructions and help with filling out and completing Why Form 2220 Managing

Instructions and Help about Why Form 2220 Managing

My name is Steve Bengston I'm with PricewaterhouseCoopers I want to welcome you to our intimate event on forming and managing boards of directors this is intentionally going to be informal panel where we encourage you to ask questions early and often because in most of the panel's we've been today and other events the audience Q&A is the best part so if you have a question get my attention and we'll get it to the panel otherwise the format is going to be I'm going to introduce each of the panels just kind of starting here and going down and they're going to chat about the main thoughts they have on this topic both from their perspective and from things you ought to know if you're in the position of creating or managing your own board or being a board member and then I'll start asked asking questions once we finish the panel discussions until I see questions from the audience and with that Diane I guess you get the favorite position where that will start with Diane Savage from Cooley I'm not going to go into their BIOS and I've asked them not to go into their BIOS because they are in the booklet if you have specific questions feel free to ask them either in the panel or afterwards Diane you have the floor first well when I was asking Steve how this was going to be organized he said well we're going to go you know from right to left in terms of speakers and I looked around and the only seat left was this one it's open so the good news is Steve also told me not to be redundant and that's not a problem for me in any event I did I I tried to kind of organize my thoughts I'm probably the least qualified person up here to be the first speaker as a lawyer and having been a lawyer in Silicon Valley for now I can't believe at 30 years I have attended hundreds of board meetings but I have not sat on a board so I'll be looking at this from the point of view of somebody who has sat in a lot of good board meetings and a lot of bad board meetings and my observations will come from the point of view in the perspective of an observer as opposed to a board participant in terms of a board member participant and I really came up with kind of seven points that I wanted to mention and I'm sure that some of the other panelists they corroborate them and others may argue that what I've said isn't true at all from their perspective first the title of this was as I understand it choose your bosses wisely forming and managing a board of directors and when I was talking about this to some of my associates of course most of the companies that we work with are venture backed companies and there isn't a whole lot of selection involved in the process of a venture back board generally speaking one thing that you need to be aware of of course and I'm sure you are when you are seeking venture capital and the VC is doing due diligence on your business plan and on you as a prospective investment you should be doing due diligence on that venture capitalist as a prospective board member because that will be your board your venture capitalists will be the bulk of your board in the early stages of the company and more than likely throughout the time that the company is privately held if you are lucky enough to be in a position to do so you will want to choose your venture capital investors based on the partners who will be sitting on your board different different VCS will bring different industry experience different perspectives different management expertise to the table and those are things that you should be thinking about as you consider which venture investor makes the most sense for you and when the VC gives you a term sheet and the term sheet will include among other things what they see is the Constitution of the board whether it's a five-person board or three-person board how many board seats the VCS get how many board seats the founders of the company get one of the things that you're going to want to do is to the extent that you are very interested and motivated to have an individual that you've been working with on your board you want to see that person's name in the term sheet so that you don't wind up in a situation where you have an expectation and under and that one person's going to be sitting on your board and you find out after the financing that it's going to be someone else the second point I want to make is don't make the mistake of putting your lawyer on the board because you think you're going to be getting free advice from your lawyer that frequently happens in rare occasions it may actually make sense to have a lawyer on your board of directors but when that lawyer sits on your board the lawyer is sitting on the board as a director and needs to be wearing his directors hat and is not there to be representing the corporation as its lawyer in fact in those situations where a Cooley lawyer sits on the board of directors of a company we will send another lawyer to the board meeting to act as the lawyer and to be sitting there thinking as the lawyer as that board meeting proceeds I also wanted to mention to you that just because and this I guess is my third point just because I'm saying that you probably don't want your lawyer and I would argue most of your other service providers on your board of

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