As we wrote in Bolster’s Founding Manifesto, one of the reasons we started Bolster was to create a new way; a faster, easier, and more cost-effective way, for startup and scaleup CEOs to grow their boards of directors and make them more diverse.
There’s a lot of research out there that the more independent a board is, the better it performs for companies — and that there’s a high degree of correlation between more independent boards and higher performing companies as well. There’s also a lot of research out there that shows that teams which have diversity of gender and race/ethnicity perform better. And everyone who has ever been on a high-functioning board of directors knows that a board is a team.
These facts are well known, yet it is still the case that most private company boards are overwhelmingly made up of founders and investors who are still largely white and male. I believe that the lack of independence and diversity on boards is a big miss for the whole startup ecosystem, and it’s a part of the startup game that we at Bolster want to help change.
Startup boards are tricky things. One of the very unique aspects of a CEO’s job that sets it apart from other executive positions is building and leading a board of directors. But most startup CEOs have either little or no experience building and leading a board, so that part of the job tends to default to a “because that’s the way I assume it’s always been done” kind of task. Of course, if you’re not intentional about building and managing a board, you’re likely to get lousy results.
Building, shaping, and leading a world class board is one of the single most important things startup CEOs can do to help their businesses thrive and become industry leaders. It’s on par with building and leading an executive team. I’ve seen amazing companies held back by weak and ineffective boards and investor syndicates, and I’ve seen so-so companies succeed because the strategic advice, experience, and accountability coming out of the board room drives the management team in extraordinary ways.
So how is Bolster helping startup CEOs change the game with respect to Boards? We are doing three things.
First, as you know, what gets measured gets managed. Our first-of-its-kind Board Benchmark application will soon produce an industry standard set of data around private company boards. You can’t find data on private company boards but we’ll soon have important data like size, composition (independents/management/investors), independent director compensation and diversity (gender/race-ethnicity/age). This will help answer questions that I know I have had many times over the years as a CEO such as
- How big should my board be at this stage?
- How many independent directors should I have?
- What is the right profile of an independent director?
- How many options should I give a board member?
Starting next week, we’re opening up our Board Benchmark application to any company who creates a free Bolster account. It will tell us a lot about the baseline across the ecosystem, and it will answer a lot of questions startup and scaleup CEOs have but can’t get answers to. Although this is an ongoing real-time benchmark tool, I’ll post some results here when we have enough critical mass to start reporting out.
Second, Bolster is in the talent business, and helping match VC-backed companies with a strong diverse slate of board candidates who are well-matched with their company is at the core of our business. We are already working on many searches for independent board members, and we’ll only be doing more of them as our client base and member base grow.
Finally, this blog post is the beginning of a whole series of posts about startup boards that we hope will demystify them a bit and help change the world’s thinking about how to grow them. Some of the material I will borrow from other blog posts I’ve written, or from the Board of Directors section of Startup CEO. Some will come from other influential VC and CEO bloggers and from Brad Feld and Mahendra Ramsinghani’s book Startup Boards. But much of the content will be new. And because Bolster is a two-sided marketplace, roughly half of the content will be aimed at startup CEOs and the other half at executives who are interested in serving on boards and aren’t sure how to get from where they are today into a board room. We’ll be sending out all the CEO posts as an eBook to CEOs who complete the Board Benchmark study, and all the Member posts as an eBook to Bolster members who fill out their Board profiles. I’ll post both of those eBooks here eventually as well.
For CEOs, the topics we will cover include
- The purpose of a board
- Size and composition on boards
- Board evolution & turnover
- Diversity in the boardroom and the importance of appointing first-time directors
- What to look for in a director
- How to recruit and interview directors
- How to onboard directors, especially first time directors
- How to compensate directors
- How to build a director bench or Advisory Board
- How to evaluate your board
For executives searching for a board role, the topics we will cover include
- What startup corporate boards look like
- How to prepare yourself to get on your first board
- Should you serve on an advisory board?
- How to interview for a Board role
- What you need to know about board compensation
- How to approach your first board meeting
- How to think about corporate governance as a board member
- How to be a great board member
- How to give advice or difficult feedback as a board member
- Making sure your voice is heard during a board meeting
- How to know if you’re doing a good job as a board member
We believe that boards can make or break a company and we intend to chart a new course for startup boards. I look forward to sharing thoughts and data with you on that topic in the weeks to come.
(Written by both my Bolster co-founder Cathy Hawley and me)
We founded Bolster two months into the COVID-19 pandemic, and our founding team had not met in person after 6 months of working together. Now, luckily, we’ve all worked together for many years, so we have a lot of trust built up, and have a very strong operating system which includes full team daily standups. Still, nothing beats face-to-face interaction. If you’ve ever founded a startup, you know how impactful it can be to work side by side, bounce ideas off each other, and collaborate as you learn more about opportunities and challenges in your market.
We also have a strong belief in the power of the team, and the need to work together to ensure that we are aligned on all aspects of the business. And, we had a successful launch, with more interest in our marketplace than we had anticipated, so we knew we needed to step back to have a planning and strategy session.
We’ve done many executive offsites, and couldn’t imagine having an impactful offsite remotely, and we all agreed that we would be comfortable meeting up in person. So we started planning a 2-day offsite together in New York. Unfortunately, it turned out visitors to NY from Colorado and Indiana, the two states we were traveling from, needed to quarantine for 10 days when they got to NY. While technically we could get around this because we weren’t staying for 10 days, we decided to follow the spirit of the rules, and cancel our travel.
Since we really needed to have the planning and strategy session, and we’d blocked the two full days on our calendars, we decided to test out a ‘zoomsite’ – an all-remote video call. We modified the agenda a little – some things good in person fall flat on video. We knew we wanted to have really engaging conversations, and keep the agenda moving along, so that all eight of us could fully participate and complete the necessary work. I’m happy to say that we came out of the offsite with a revised strategic plan, new six-month goals set, and owners for each of the different workstreams. And, we had fun. Success!
The Foundry Group CEO Summit has been a different animal — it’s wrapping up today, but there’s been enough of it so far this week to comment on. Foundry took a regular annual event with a large group (50-75) and moved it online. They did a great job of adapting to the medium, spreading the event out with a few hours a day over multiple days to avoid Zoom fatigue and optimize attendance; scheduling content in shorter bursts than usual; making good use of breakout room technology; and encouraging heavy use of Zoom’s chat feature during sessions to make it as interactive as possible. Like the Bolster event, there were some elements missing — all the great “hallway conversations” you have at in-person conferences where people are staying in the same hotel and seeing each other at meals, in the gym, between sessions, etc. But it has also been a big success with enough community elements to make it worthwhile.
Want to have a Zoomsite? Here are some tips:
- Make sure you have the tools needed for each activity. When you are brainstorming in person, you may use sticky notes or flip charts to write on. Remotely, you can use Google Docs or Sheets or tools like Note.ly or Miro
- Prep the sheets or docs ahead of time, so that people can engage in the activities easily. At our Zoomsite, we modified our blue-sky brainstorm session so that we each answered a few questions in a Google Sheet. We had a separate section for each person, and the exercise was easy to understand and engage in, and people got straight to work.
- Schedule in more breaks, shorter sessions, or less than full-day meetings. We had a couple of hour-long breaks during the day, which helped people to focus. Foundry did a great job of getting everyone’s attention for a few hours every day, for more days than a normal in-person conference
- Plan your technology. At the Bolster meeting, we learned this the hard way. We tested out the idea of doing a “walk and talk” session where we’d each walk in our neighborhoods, and have a couple of strategic conversations just on the phone. Unfortunately, the technology didn’t work for everyone, as they hadn’t all used Zoom on their phones before, it was windy in some locations, and cell service dropped people from time to time. Probably not the best idea we had!
- Include a social component. We were a little skeptical about this at the Bolster Zoomsite, but we’d always incorporated social time into offsites, and we really value connecting as people, not just as professionals, so we gave it a try. On the second day of our Zoomsite, we took a 2 hour break at the end of the day, and came back for drinks and dinner together. We had personal conversations, including sharing our favorite tv shows. Eight people on video eating together might sound odd, and we weren’t sure if it would work, but we all agreed that it was fun, and we’d do it again. I missed the Foundry “Virtual Fun” session, but they did a virtual game show run by our sister portfolio company, Two-Bit Circus (and also had investigated Jack Box Games as another option for virtual games via Zoom screen share plus real-time voting and other engagement via phone). I heard that session was great and engaging from people who attended
We all hope life returns to some kind of normal in 2021, though it’s unclear when that will be. And there’s definitely value to doing meetings like this in person, but at least we now know that we can have a successful remote offsite or larger conference event. As with everything, it will be interesting to see how the world is changed by COVID. Maybe events like this will figure out how to mix remote and in-person participation, or alternate between event formats to keep travel costs down.
(This post also appeared on Bolster.com).
As we wrote in The Gig Economy Executive, the major societal trend to “gig,” or part-time/freelance work, has reached the C-Suite. We created Bolster to help organize a talent marketplace out of what is mostly an informal economy today – one where VC- and PE-backed companies find trusted freelance executives and consultants from their networks.
In that earlier blog post, we wrote about the different types of on-demand executive work that C-level executives engage in: interim, fractional, mentor/coach/advisor, project-based consulting, and board roles.
As we’ve been building Bolster this year, we’ve come to appreciate that not only are there different types of gig economy roles…there are several different archetypes of gig economy executives, too. While there is a clear common theme of the desire to do some form of freelance, or non-full-time work that cuts across the four types, they are very different in their stage of life and their needs. These are our four main Member user personae, to use the language of Product Management.
First, there is the In Between Executive. This is the original concept of our founding investors at High Alpha and Silicon Valley Bank that drove their interest in Bolster. The In Between Executive is someone who is generally mid-career and used to working in full time C-level roles and is, for whatever reason, between jobs at the moment. Maybe her company just got acquired and she is taking a break. Maybe her company restructured her out of a job. Maybe she needed or wanted to take a break from work for family or health reasons. Maybe she was just ready to look for a new career challenge. The In Between Executive is perfectly suited to any of the on-demand executive role types but is a particularly good fit for interim CXO, mentor/coach/advisor, and project-based consulting roles.
Second, there is the Career On-Demand Executive. The Career On-Demand Executive is usually someone who has had many years of experience as a full-time executive and who is now looking for something more flexible, or who just enjoys more variety in his work. One of the Career On-Demand Executives in the Bolster network I spoke with early on described her journey to me like this: she was “between things” when a friend of hers who had moved to France and started a company asked her to come set up her HR Department and run it for 6 months while hiring full-time staff. She took a month off, lived in Paris for 6 months, took another month off, then started to look for something else like that. Ooh la la. Sounds pretty good to me. The Career On-Demand Executive is a particularly good fit for interim CXO, fractional CXO, and project-based consulting roles.
Next, there is the Not Retired Executive. When I think of the Not Retired Executive, I think of my Dad, who was a successful technology entrepreneur for 30+ years. Since he sold his company several years back, he has helped a number of startup CEOs do everything from raise money to build a sales and marketing plan, to manage supply chains. Sometimes he gets paid in cash as a consultant, sometimes he gets equity as an Executive Chairman. Sometimes he talks to younger entrepreneurs and helps them out “just because.” The reality of the Not Retired Executive today, however, is that many people are “not retiring” younger and younger because they’ve made enough money to take a step back from hard-charging full-time jobs. The Not Retired Executive is perfectly suited to any of the on-demand executive role types. The ones who are later in their careers and closer to being actually retired are particularly good fits for mentor/coach/advisor and board roles.
Finally, there is the Side Hustle Seeker. The Side Hustle Seeker is someone who is a full-time executive somewhere but who is looking for additional professional opportunities. She may be an experienced CMO who is excited about mentoring up-and-coming marketing leaders via a local or industry-based professional organization. She may be looking for chances to “pay it forward” because someone mentored her along the way, earlier in her career. She may have accumulated enough experience and wisdom to be ready for her first board of directors seat. Regardless, she’s someone who is a “high wattage” professional who wants to learn and grow herself by connecting with others outside her day-to-day role. The Side Hustle Seeker is best matched with mentor/coach/advisor and board roles.
So, what kind of gig economy executive are you, and how can Bolster help you find the kind of work you’re looking for while providing you with tools and resources to simplify your life? Join Bolster as a member to find out!
(This post also appeared on Bolster.com)
As we wrote in our Founding Manifesto, Bolster was started in part to create a new way for startup and scaleup CEOs to think about growing their leadership teams.
Why do CEOs need help with this?
CEOs of any company have too many things to do at all times. This is even more true at startups and scaleups, which by definition are more fast-paced, dynamic, CEO-driven, and thinly staffed. All those challenges point directly to the specific challenge CEOs have with their leadership team.
Think about the journey of a company from a founding team to 50 employees. My long time friend and former board member Greg Sands once compared the phenomenon
of companies growing out of the startup stage to cell development in small organisms. Amoeba or paramecia consist of one cell, and that cell has to do everything: eat, move, sense its surroundings, and respond accordingly. When the cell divides, the new cells still need to do everything – they’re just attached to other cells. As organisms grow more complex, individual cells need to specialize. And when things get really complex, you need a liver, a spleen, a stomach, and a pancreas. By and large, startups work the same way. In the early stages, you have to hire generalists who are both willing and able to take on dozens of tasks at once. Your developers will have to speak with potential customers; your accountants will have to give advice on product direction; and the born salesperson on your team will need to put the phone down a few hours a day and set up a new employee’s computer. That’s a really different team than when you need functional managers on top of engineering, sales, etc. — not to mention needing strategic leadership of those functions as the company grows from 50 to 100 to 250 to 500 employees.
That’s the journey that startup and scaleup CEOs are on. It’s less of a journey and more of a roller coaster ride. Jason is running HR today…but tomorrow, the job of “head of HR” will be different, and Jason might or might not be capable of it. Then your VP Finance Sally gets lured away by an even hotter and sexier new startup and leaves a sudden, gaping hole on your team. Then cracks start to show up with the job Jamie is doing as your marketing director and you lose confidence that your upcoming product launch is going to be a success. Every time one of these events happens – whether it’s an actual event, or just an “aha moment” for you as CEO, you add something to your plate. You add tasks to take over work yourself. You add the task of finding a new person. You add stress from having to deal with one more critical thing.
Leveling up a leadership team is probably the hardest part of the CEO’s job.
Why don’t current solutions meet the CEO’s needs? Well, of course they do, sometimes. The problem is that the current solutions either aren’t tailored to the needs of startup or scaleup CEOs, or they’re ad hoc and inefficient. Executive search is slow and expensive, and it produces expensive full-time executives. And no matter how good an executive search firm is, I’ve never met a CEO who has a better than 50% success rate in hiring new leaders from the outside. Ever. Add all that up – expensive, slow, medium success rate, and perhaps most important for a startup CEO, leaving you with expensive full-time headcount in multiple areas of your company – that is not a recipe for startup success when you’re sweating your burn rate.
Frequently, the CEO just taps her network for execs or for on-demand executives like the ones Bolster places — that could be asking board members or friends or advisors for suggestions. Quite frankly, those suggestions stand a better chance of success than transactional executive search since the candidate referral source is usually somewhat of an insider. But those searches are really disorganized or one-off. When a CEO turns to their network for spot help, they often aren’t running a comprehensive process, creating a serious job spec, seeing a broad set of candidates for comparisons, and the like.
Our job at Bolster is to make all of this easier and lighter weight. The rise of the gig economy means that startups no longer need to rely on the painful binary choice of “the person/opening I have today” and “the expensive full-time exec coming in from the outside.”The new way to scale an executive team is with a mix of interim executive talent to quickly fill gaps, fractional executive talent to provide strategic oversight and guidance to a team, part-time, functional mentors/coaches/advisors to advise a less experienced functional leader, project-based consultants to fill in specific holes, and yes, the occasional full-time outside hire, possibly via a search firm (or if your fractional CXO loves your company and joins full-time!).
With Bolster, you have a network of all those types of talent, well curated and well profiled, available for near-instant matches and near-instant start dates – and a suite of tools and services designed to help you proactively identify your needs across all your functional areas so you’re never scrambling your way out of a tight spot.
What about the existing team? If you’re a leader inside a startup or scaleup, Bolster is ALSO created for you. The painful binary choice CEOs face that I wrote above is particularly painful for you if you’re no longer scaling quickly enough. Frequently, promising junior people are layered or shuttered aside because the CEO doesn’t have the time, or the functional expertise required, to coach or mentor the person to success. Bolster creates an easy mechanism for CEOs to help pinpoint the areas in which you need growth and development as well as an easy way to find either temporary leadership or a function-specific advisor/mentor/coach to help you grow with the role and with the company.
The best startup CEOs I know are the ones who are already using multiple types of on-demand talent at the same time to help their companies along that journey from single-cell to complex organisms. I believe three years from today, the frequent usage of this kind of talent will move from the realm of early adopters to mainstream. The ones who embrace it first will have a competitive advantage.
(This post, written by my co-founder Cathy Hawley, also appeared on Bolster.com)
The gig economy is a labor market where short-term or freelance roles are more prevalent than permanent positions. It’s generally characterized by having independent contractors rather than full-time positions, but in some locations and for some types of roles, gig workers may be part-time or fixed-term employees.
The gig economy that started with roles like artists, drivers and web designers is quickly expanding to include executive-level roles. There are a few trends in today’s workplace that are driving this expansion. Startups and scaleups have more flexible, remote-friendly work environments and are looking for creative, less expensive ways of accelerating growth. Executives have shorter average job tenure and are more often displaced or between roles, and they are also interested in the flexibility that gig work can give them.
In a study conducted by MavenLink/Research Now, “The White Collar Gig Economy,” 47% of companies state they are looking to hire contractors to fill management and senior executive roles, including c-suite contractors. At the same time, 63% of full-time executives would switch to become a contractor, given the opportunity. These trends will be accelerated by the current economic downturn and recovery, as some companies have fewer resources, and more executives are displaced.
At the executive level, there are a few different types of roles that could be considered ‘gigs’. The most common two are coaching and project-based consulting. Coaching or advising, and particularly CEO coaching and advising, has become very prevalent over the last 10 years. The CEO hires a coach who can help them navigate new situations and challenges. Often, CEO coaches stay with a CEO for a number of years, helping guide and support them through the stages of company growth. There are also coaches and advisors for other functional areas to provide similar support for other executives, although more commonly these coaches are hired for specific initiatives.
Then there is project-based consulting, where executive-level talent is hired to run a specific project such as reviewing a company’s packaging and pricing, performing due diligence on an acquisition, creating a Diversity, Equity and Inclusion strategy, or creating an investor deck for a fundraising event. This type of consulting isn’t new, and it’s similar to what large consulting firms offer. It seems to be more prevalent now for very senior roles than it ever has been in the past.
But the gig economy for executives now reaches well beyond coaches and consultants. There are also executives who are hired into interim leadership roles while a company searches for a permanent placement. Some roles take a long time to find the right person, but there’s an urgent need for someone to take on the leadership mantle in the interim. If the interim executive is a good fit, and is open to it, it’s not uncommon for this individual to be considered for the permanent position. “Try before you buy” works both ways — it can be good for the company and good for the executive, too.
An up-and-coming type of executive gig role is the fractional role. We are seeing this more and more in the last couple of years. Fractional executives can either be consultants or employees, since the expectation is a long-term relationship, on a part-time basis. For example, 3 days or a certain number of hours per week. The fractional executive is responsible for all functional areas as a full-time executive in that same role. The company may be too small to need (or afford) their level of expertise on a full time basis, but needs more than just an advisor or project consultant. The fractional executive generally remains with a company until the company needs a full-time leader for that function, in which case either the fractional executive goes full-time, or the company hires someone new. Fractional executives may support more than one client at a time, and may also come with a team of more junior functional experts who can support them to take on more work.
Finally, for our purposes at Bolster, joining a company’s board of directors could be considered taking a ‘gig’ role since it’s not a full-time executive role. Startups and scaleups need independent directors, and their needs change based on their size, stage and strategy. We see a growing trend of companies contracting with directors for 1 -2 years rather than lifetime service.
There’s a real opportunity right now for companies to capitalize on the expertise of this talent pool without having to hire them for long-term full time roles, and for executives who want to contribute their skills and expertise without the commitment of a 80-hour work week. Bolster is helping bring these two audiences together in a marketplace that matches on-demand executives with companies who need their services the most. Bolster also provides services for members so they can focus on their consulting rather than their business, and for companies to evaluate their executive teams and boards.
Welcome to Bolster, the on-demand executive talent marketplace. We are creating a platform that is the new way to scale an executive team and board.
We believe that startups and scaleups are not average companies. Their rapid growth means their appetite for talent constantly outstrips their budget — and that they can’t spend months searching for it. Their dynamic industries dictate that they keep pace with bigger and better funded competitors. Their leadership teams — the people and the roles — are always changing. Their CEOs spend a ton of time hiring and coaching their leaders and shaping the complexion and direction of the team. They stress out about big expensive new executive hires when sometimes they just need to level-up an existing manager or “try before they buy.” Their Boards frequently jump in to help, but those efforts can be a little ad hoc and inefficient.
We believe that experienced executives working as consultants is the wave of the future. The number of career executives who work flexibly and on-demand for a living is skyrocketing in recent years. People are more often “between things” and are interested in plugging into shorter-term engagements while continuing to look for their next full-time role. People are retiring younger, yet wanting to keep contributing. And even fully-employed execs like to advise companies and serve on Boards. Whether these people are career consultants or are looking for a “side hustle” or just to pay something forward to a future generation of leaders, they all have two common problems: finding work is time consuming and they’re often not good at or don’t like doing it; and managing their back office, everything from insurance to legal to tax to marketing, is a drain on time that could otherwise be spent with clients or family.
We believe that a new kind of talent marketplace is needed to meet the unique and complex requirements of both audiences — the freelance, or flexible, seasoned executive, and the startup or scaleup CEO who thinks holistically about his or her leadership team and carefully tends them like a garden. We are building a platform to make instant, tailored, vetted matches between talent and companies without the randomness of a job board and without the theater, long lead times, and cost, of a full service agency
Service marketplaces like ours work best when they help their stakeholders solve other meaningful, related problems.In this case, we believe that the need for back office services will help executive consultants focus on more important things. And we believe that CEOs need lightweight and dynamic support in thinking through the composition and skills required of their executive teams both today and 6-18 months in the future.
That is the essence of the business we are building. A business to quickly match awesome companies with awesome freelance executives and to help both sides be better at what they do. We are here to make it easier for you to:
- Bolster your executive team. For our Clients, our pledge to you is that we will quickly and cost-effectively fill the gaps in your leadership ranks (whether interim, fractional, advisory, board, or project-based) with trusted, curated talent, and that we will give you a platform to evaluate your overall leadership team and help you think through your future needs as your company evolves. Think of us as a shortcut to scaling your leadership team.
- Bolster your board. The best boards are the ones with multiple independent directors who come from diverse backgrounds with diverse points of view. We also pledge to our Clients that we will find great matches to help fill out their boardrooms as their strategic advisory needs change over time.
- Bolster your work. For our Members, our pledge to you is that we will find you the right kind of interesting clients and help you manage your back office so you can focus on your work (and all the other important things in your life!).
- Bolster your portfolio. For our Portfolio Partners, VC and PE board members, our pledge to you is that we will make it easier for you and your firm to both drive successful on-demand executive placements for your portfolio company CEOs, and to manage and expand your firm’s network of flexible executive talent.
We are an experienced team of entrepreneurs and operators who have scaled multiple businesses throughout our careers. All of us worked together as part of the leadership team at Return Path, a leading email technology company that we scaled from 0 to $100mm in revenue and 500 employees in 12 locations around the world while winning numerous Employer of Choice awards. All of us have independent experience scaling other businesses, small and large, public and private. All of us have experience being on-demand executives as well — whether interim, fractional, advisory, project-based, or board roles, we know the landscape of both our members and our clients.
We’ve all dealt with the stress of having product-market fit and market opportunities but not being able to capitalize on those opportunities because we were missing key talent. And we’ve tried everything from executive search firms (expensive, time-consuming, and slow), to leveling up people (will they be able to grow into the role?), to leaning in to our board (hit or miss, inefficient). Heck, we’ve been desperate enough to follow up on the “my cousin’s boyfriend has an uncle, and he might know someone” lead.
We believe there is a better way for startups and scaleups to find executive talent. Along the way, I published a book about scaling startups called Startup CEO: A Field Guide to Scaling Up Your Business that has sold over 40,000 copies to CEOs around the world. And our whole team is working on a new book called Startup CXO: A Field Guide to Scaling Up Your Teams, which is coming out in early 2021. Our team has a maniacal focus on helping startup teams scale and flourish and on helping leaders develop into the best version of themselves. That’s what we’re all about.
Plus, we have an amazing group of investors behind us who know how to grow businesses like ours and have incredible reach into the startup and scaleup world. More about that later. For now, we are excited to
soft launch Bolster and begin unleashing the power of on-demand executive talent to our Clients. Thank you for being on this journey with us. If you’re interested in the somewhat unusual story of how the company was founded, it’s here.
As I mentioned earlier this summer, I’ve been working on a new startup the past few months with a group of long-time colleagues from Return Path. Today, we are officially launching the new company, which is called Bolster. The official press release is here.
Here’s the business concept. Bolster is a talent marketplace, but not just any talent marketplace. We are building a talent marketplace exclusively for what we call on-demand (or freelance) executives and board members. We are being really picky about curating awesome senior talent. And we are targeting the marketplace at the CEOs and HR leaders at venture- and PE-backed startups and scaleups. We’re not a search firm. We’re not trying to be Catalant or Upwork. We’re not a job board.
To keep both sides of the marketplace engaged with us, we are also building out suites of services for both sides – Members and Clients. For Members, our services will help them manage their careers as independent consultants. For Clients, our services will help them assess, benchmark and diversify their leadership teams and boards.
We have a somewhat interesting founding story, which you can read on our website here. But the key points are this. I have 7 co-founders, with whom I have worked for a collective 88 years — Andrea Ponchione, Jack Sinclair, Shawn Nussbaum, Cathy Hawley, Ken Takahashi, Jen Goldman, and Nick Badgett. We have three engineers with whom we’ve worked for several years who have been on board as contractors so far – Kayce Danna, Chris Paynes, and Chris Shealy. We have four primary investors, who I’ve also known and worked closely with for a collective 77 years — High Alpha and Scott Dorsey (another veteran of the email marketing business), Silicon Valley Bank and Melody Dippold, Union Square Ventures and Fred Wilson, and Costanoa Ventures and Greg Sands. Pretty much a Dream Team if there ever was one.
So how did our team and I get from Email Deliverability to Executive Talent Marketplace?
It’s more straightforward than you’d think. If you know me or Return Path, you know that our company was obsessed with culture, values, people, and leadership development. You know that we created a cool workforce development nonprofit, Path Forward, to help moms who have taken a career break to care raise kids get back to work. You know that I wrote a book for startup CEOs and have spent tons of time over the years mentoring and coaching CEOs. Our team has a passion for helping develop the startup ecosystem, we have a passion for helping people improve and grow their careers and have a positive impact on others, and we have a passion for helping companies have a broad and diverse talent pipeline, especially at the leadership level. Put all those things together and voila – you get Bolster!
There will be much more to come about Bolster and related topics in the weeks and months to come. I’ll cross-post anything I write for the Bolster blog here on OnlyOnce, and maybe occasionally a post from someone else. We have a few opening posts for Bolster that are probably running there today that I’ll post here over the next couple weeks.
If you’re interested in joining Bolster as an executive member or as a client, please go to www.bolster.com and sign up – the site is officially live as of today (although many aspects of the business are still in development, in beta, or manual).
As part of the new section on Exits in the Second Edition of the book (order here), there’s a final chapter around you as CEO and thinking about what you do next. I’ll start this post by saying, while am really happy with where I am now (more to come on that!), I am not happy with the way I handled my own “next steps” after the Return Path exit. I did follow some of my own advice, but not enough of it. I jumped back into the fray way too quickly.
Some exits leave CEOs in a position of never having to work again – those are good in that they give you more time to think about what’s next and more options for what’s next, but no financial forcing function to do anything. Some CEOs want to work again in the same field, doing another startup or being hired to run a larger company or focusing on serving on boards and mentoring other CEOs. Some want to transition to a different kind of work entirely.
But no matter what your circumstances are, the most important thing you can do after selling your startup is to downshift and take time off. You probably haven’t done that in years, maybe decades. You may feel like you only have one gear – ON – but in fact, you can get into new patterns of life and take time to enjoy and appreciate things you may have neglected for years and do some of what Stephen Covey calls “Sharpen the saw.” Here’s an excerpt from the book about this:
There’s more to thinking about your next step than just clearing your head, of course. You have to spend some cycles being reflective about the journey you just went on. Our senior team, including a couple long time alumni, gathered and did what I call the “ultimate post mortem,” reflecting on lessons learned over 20 years. I spent some time thinking about how to tell my story, what my own narrative was about the journey. And I came up with my framework for deciding what to do next – that checklist of the things I wanted and didn’t want in my next job, which is detailed in the book, and which I’ll talk about more in the weeks to come as we prepare for the public launch of our new company. But for now, this is the final teaser post I’ll write about the Second Edition of Startup CEO: A Field Guide to Scaling Up Your Business. Next week, though, I will write about the sequel my colleagues and I are writing at our new business.
As part of the new section on Exits in the Second Edition of the book (order here), there’s a specific chapter around handling the post-sale transition and integration process.
No two transitions are exactly the same. If the buyer is a financial sponsor, you may have the same job the day after the deal closes that you had the day before, just with a new owner and new rules for you. Sometimes you’ll stay on with a strategic buyer as the head of a division, or the head of your product. Sometimes you leave on Day 1. Sometimes you leave later.
But the most important thing you can do is remember that once the deal is over, it’s over. That’s why an honest answer to the question, “Are you ready to let go?” that I posed in an early post is so important. You may or may not be the CEO, but now you definitely have a new boss, and in many cases, a boss for the first time in years. And you are no longer in charge.
“Even though the deal was called a merger,” I once heard Ted Leonsis tell the Moviefone founders a while after AOL acquired Moviefone, “please remember that you have been acquired.” Your job is to figure out how best to set your team and products up for success in the new environment, regardless of how long or short you plan to stay at the new company.
We tried to focus our transition at Return Path to Validity in a few ways:
- For employees, we spent most of our energy and our capital setting things up in the deal documents before closing, recognizing we’d have no control of things after the deal was signed. Things like how much severance people would get if they were let go, and for how long post-deal, how much their comp could change, whether they could be required to move – those are all things you can negotiate into a deal
- For ourselves as leaders and me as CEO, knowing most of us would leave almost immediately post-deal, I wanted to have as elegant an exit as possible after 20 years. Fortunately, I had a good partner in this dialog in Mark Briggs, the acquiring CEO. Mark and I worked out rules of engagement and expenses associated with “the baton pass,” as we called it, that let our execs have the opportunity to say a proper goodbye and thank you to our teams, with a series of in-person events and a final RP gift pack. This was a really important way we all got closure on this chapter in our lives
- For the new owners of the business, our objective was to be of service to them, knowing they’d want to run it differently. So, for example, every time our new owners from Validity asked me a question (“Should we do X or Y,” or “Should we keep person A or person B?”), my answer was never simple. It was always, “What’s your strategy with regard to Z?” and then my advice could be in context, as opposed to thinking about what I would do in the prior context.
There are more details on this in the new section on exits in Startup CEO: A Field Guide to Scaling Up Your Business.
As part of the new section on Exits in the Second Edition of the book (order here), there’s a specific chapter around the sale process itself. There are some interesting things in it — the arc and timeline of a deal, working with and through advisors vs. principals dealing with each other directly, optimizing for different stakeholders, and a wonderful long sidebar by my friends and advisors Brian Andersen and Mark Greenbaum from Luma Partners on how to think strategically about an exit and how buyers think. It’s probably worth buying the whole book just for that.
But what I want to write about here is coping with a failed deal – something my team and I unfortunately had to do a couple years before we actually sold the company and something I’ve never written about or discussed publicly.
In 2017, we almost sold Return Path. You hear people talk about that from time to time, and frequently it just means “we had a good offer but decided not to take it.” But in this case, I meant it. We had a good offer. We talked to a couple other potential buyers in the industry and ended up getting a great offer. From a great buyer. We decided to pull the trigger. It was time. We got through the entire deal process, I mean EVERYTHING. Diligence was painful, thorough – and completed. Both sides had signed off on things many times along the way. Documents were done, lawyers had signed off on them, our Board had signed off on them, they had been posted to DocuSign, and our signatures were in escrow. The press release was written and scheduled to go out in less than 48 hours. Our all-hands meeting was scheduled. The acquirer had already sent us their swag to hand out. About 80 people out of 400+ employees at the company knew about it. In the football analogy, we weren’t inside the red zone. We were on the 1-yard line.
Then the call came. “I can’t believe we have to tell you this, but our CEO just decided to pull the plug on this at the last minute.” Buh. Bye. To say this was a disappointment is the understatement of a career.
That evening, I was staying over at a friend’s apartment in Manhattan while Mariquita and the kids were away at the beach with her parents. After the call came in, I grabbed the two other execs who were still in the office, and we went immediately to a bar. That calmed me down a little bit. Then I wandered through Central Park up to the apartment and spent about 4 hours on the phone in a series of cathartic phone calls with the rest of the executive team, some of my closest friends and advisors, and Board members.
The next couple of days were awful. We had to tell a huge number of employees “Uh sorry, just kidding. You know all those stock options that were just about to turn into cash? Sorry. The new company we were all excited to join? Psych!” The worst part was scrambling to turn the already-scheduled all-hands meeting to announce the deal into just another quarterly update. Everyone in the room for that meeting who knew about the failed deal just looked at each other with disbelief. We were still in shock.
Eventually of course, we bounced back. I am now an even more ardent believer in the expression, “What doesn’t kill you makes you stronger.” The company ended up recovering from this and doing a number of things to make us even better in the years that followed, leading to our eventual sale. But I will say, it was just terrible, and nothing about the recovery was easy. I talk about some of the specific steps we took in the book. But mostly, I hope no one ever has to go through anything like this again. This was too big, too close to the end, and too well known. Our team will have deep scar tissue from it for a long time.
As part of the new section on Exits in the Second Edition of the book (order here), there’s a specific chapter around Preparing Your Company for an Exit. That’s pretty different than Preparing Yourself (last week’s post).
This chapter really focuses on two things. One is how to think about who within your company knows about the possible deal, which conversations you keep private and which you have more in public. I’ll save the details on that one for the book.
But there’s a second topic that’s important as well. And it’s about due diligence and disclosure schedules. What fun! I call it “Begin with the end in mind.” The advice in this section of the book, which is “get a full and complete due diligence checklist from your lawyer before you start a sale process” is something I wish I had done the day I started the company, not the day I started the sale process.
Knowing what things buyers will want to see, in what form, and how well organized, would have influenced me and my CFO to be more orderly about corporate records (things like shareholder votes and board minutes) as well as client contracts. It’s not that we were disorganized, but over 20 years we put things in several different places and didn’t always migrate old records to new systems. When it came time to put together due diligence and load things into the data room, it was a lot more complicated than it needed to be.
As you can imagine, we are doing this very differently at our new company. Even if you aren’t well organized now at your company, put on your to do list some kind of spring cleaning of corporate records. The earlier you do it, the better. Besides, when you first startup you won’t have a ton of details to keep track of so it ought to be easy to do. As you scale you’ll have systems and processes in place as well as, hopefully, ONE PLACE where you store all this information. The time NOT to do it is when you’re in the middle of a very time consuming sale process and simultaneously trying to run your business.