Author: Tom Koor

Tom Koor

What is the value and role of a lead investor?

You may download a PDF of this article from: What is the value and role of a lead investor

How do you read this article?

  • This article is written for startup founders.
  • There are two examples of a lead investor.
  • Then there is a generic description of a lead investor. The lead investor in your specific situation will likely be different.

Two examples of a lead investor:

The lead investor in an angel investor organization

  • Produces the due diligence report. Consultants and other angels may have provided input to the report and carried out specific due diligence task.
  • Negotiates with the founders on behalf of all the angels.
  • Manages angels’ lawyers.
  • Manages the angel close including getting the money into escrow.

The lead investor of a syndicate:

  • Has prepared a due diligence report, completed a term sheet after negotiations with the founders.
  • Then begins to actively recruit more investors to the deal.

What is the value of a lead investor?

  • Without a lead investor, you may fail to raise capital.
  • The reputation and network of the lead investor will attract other investors.
  • Many VCs, angels, and angel groups will not invest until there is a lead investor.
  • Including the name of the lead investor and terms in your pitch deck greatly improves your chance of success.
  • Having a lead investor reduces the overall time and effort to raise capital.
  • The lead investor will make a major investment, at least 15% of the round and sometime up to 50% of the round.

What may the lead investor do?

  • Prepare a due diligence report. Subsequent investors may still decide to conduce their own due diligence.
  • Negotiate the term sheet.
  • Hire a law firm to handle the investors paperwork. Sometimes the startup will pay for some or all of the lead investors out-of-pocket costs.
  • Sit on your advisory board.
  • Sit on your board of directors.
  • Make introductions to potential investors, customers, partners, suppliers, employees, and others.
  • Help manage the other investors.
  • Help structure future fund raising rounds.
  • Participate in future fundraising rounds.

What are the characteristics of a lead investor?

  • They passionately believe in you and your startup. They are not going to try to force you out and take control.
  • You’ll be able to work with them for the long term. Divorce from a spouse is often easier than divorce from a lead investor.  Do you actually like the lead investor?
  • Consider the investor’s values, morals, and ethics.
  • They are respected in your industry and/or in the startup financing world.
  • It’s helpful if the lead has been a lead before.
  • They have invested before and those investments have done well.
  • They have lots of funds for follow on investments and investments in other startups.
  • They are not in any kind of financial distress.
  • The investors have diverse portfolios so that market problems in one sector will not result in pressure on your startup to perform.

Look for the lead investor before you look for the follow-on investors.

  • This can take a long time.
  • You may make hundreds of phone calls and emails, meet with over a hundred people, and spend over 20 hours a week for three to nine months to find a lead investor.
  • You need to build relationships with investors over time. You’ll need a plan, and a CRM, to stay in touch with them.

How do you find a lead investor?

Your next steps

  • Define what you are looking for in a lead investor.
  • Set out you plan to find a lead investor and to stay in contact with the investors you have met.
Tom Koor

How do you understand potential investors?

You can download a PDF of this article from: How do you understand potential investors?

Why understand potential investors?

You will fail to raise capital if you:

  • Don’t understand the investors needs.
  • Don’t understand how the investors perceives how you meet their needs.
  • Don’t understand how the investors perceive that you meet their needs better than others asking for capital.
  • Spend time on investors who will never invest with you rather than spending time on investors who have needs you might be able to meet.

Or, as Karen Kelly of K2 Performance Consulting told me, “Don’t try to sell steak to vegetarians.”

The overall process is to:

  • Document some hypotheses: What are the characteristics of a potential investor? What are their problems and needs?
  • Document your hypotheses in the business model canvas1. This framework ties together investors, their needs, your solution, and what’s required to build your solution.  Your business model canvas will change as your hypotheses change, are validated, or are invalidated.
  • Test the hypotheses by interviewing potential customers. These are not sales calls.
  • The interview process will either validate or disprove your hypotheses.
  • During the interview process you will likely revise some hypotheses, as well as set down some facts (i.e. validated hypotheses).

Key Hypothesis for the rest of this article:

Let’s assume your target investor is the individual investor who makes decisions regarding some or all of their investable assets.  There would be different needs if your target was: the Chief Investment Officer of family office; the financial advisor who makes investment decisions for clients; or an institution investing capital.

 Why is a business model canvas critical?

Let’s pick a simple example to illustrate:

  • You want to raise $10 million and you plan to do $25,000 asks from investor with investable assets of $3 -$5 million. You’ll need have 400 investors.  OR are you planning to do $1,000,000 asks from investors with investable assets of $100,000,000+? You’ll need 10 investors.
  • Your channels, partners, resources, activities, etc. will be radically different for each of the above two examples.

A business model canvas will help you think this through.

What are some aspects of the target investor profile?

  • Age?
  • Gender?
  • Location?
  • Where born and where living now?
  • Current income and occupation?
  • Current net worth?
  • Part of a high net-worth family?
  • Supported by a family office, shared or dedicated to one family?
  • % of assets managed (i.e. investment decisions made) by third parties vs made directly by the investor
  • Associations membership e.g. Tiger 21 or Family Enterprise Xchange?
  • Yearly living expenses – e.g. some potential investors may have fractional jet ownership?
  • Future major expenses – this could range from several hundred thousand dollars to support a child in a foreign university, to a $100 million+ for their next yacht?
  • Do they have a documented investment thesis?
  • Do they have little time to manage their investments, are they devoting significant time to manage their investments?
  • What is their asset allocation mix? Specifically, what % of assets are they allocating to the asset class you are part of?  Two examples:  1) You’re a fintech company using AI to analyze home mortgage approvals.  2) You’re an early stage Venture Capital fund investing in companies with women founders.

What are potential investor needs?

Investor needs can include social, emotional, and financial needs.  These needs may include:

  • Being perceived by others as: a sophisticated investor, someone making a positive impact on society or a specific cause.
  • Having the satisfaction of knowing they are doing good.
  • Being actively involved and devoting time to managing their investment. They value the social interaction with other investors.  They value being a coach or mentor to the CEO, being on the advisory board, or being on the board of directors.
  • This type of investment is a hobby.
  • They are seeking a xx% probability of achieving YY% cash-on-cash return within ZZ years?
  • They are seeking wealth transfer to their children and grandchildren.
  • IRR is of little interest.

What value will the investor provide to you and your company?

Investors can provide value in many ways.  Some of the hypotheses in your business model canvas may include:

  • Providing capital both in the short- and long-term.
  • Enabling your capital raising by drawing upon their network of investors.
  • Providing access to their network of potential channels, partners, suppliers, customers, and employees.
  • Enabling your success based on the reputation of the investor.
  • Being a coach or advisor to you.
  • Serving on your advisory board or board of directors.

What are the dos and donts?

  • Do document and execute a structured process.
  • Do define your target investors and select potential investors who are representative. For example, if you are creating a venture capital fund which will focus on providing investor exits within 3 years, do not interview potential investors who seek a 20+ year exit in order to facilitate inter-generational wealth transfer.
  • Do face-to-face interviews. Video calls are a distant second best.  Phone calls are a very distant third best.  Don’t do emails or surveys because those do not allow interactive dialogue and understanding.
  • Do get out and interview lots of investors. The absolute minimum number of investor interviews is 10.  50 interviews are a better number.  You will have to contact many people to get the necessary interviews because most people will decline.  They are strangers with busy lives.
  • Do ask potential investors if it’s OK to record the interview for later analysis. If not, have a second person take detailed notes.  Do not conduct a non-recorded interview by yourself.
  • Do document the criteria for assessing the answers. This will avoid confirmation bias, in which you’ll ignore information which invalidates your hypotheses.
  • Do not interview friends, family, or those you have a personal connection with. You need brutal honesty, rather than hearing from people who do not want to hurt your feelings.
  • Do focus on the people who actually have the problem or need for which you are creating the solution.
  • Do create questions which require quantitative answers or specific descriptions. Don’t ask for subjective or hypothetical feedback.
  • Do create questions which help you understand how investors think, and why they take the actions they do.
  • Do not talk about your company in your initial meeting.
  • Do not use or send a survey form. These tend to ask closed-ended questions, while you want open-ended responses to open-ended questions.
  • Do finish each interview with two questions: “Who else would you recommend I interview?”, and “What should I have asked but did not ask?”
  • Do create a data collection form for each interview. This will contain things such as: the description of the investor profile, your open-ended questions, which hypotheses were confirmed and why, which hypotheses were invalidated and why, which hypotheses you gained no insight into and why, what changes you should make for the next interview (target customer profile, hypotheses, questions to ask).
  • Do review and update your business model canvas as you validate your hypotheses regarding target customers and their needs.

Other ways to understand investors:

  • Read research reports e.g. Tiger 21 reports.
  • Document and analyze sales calls on investors.
  • Interview your existing investors.

What are the challenges in interviewing potential customers?

  • The FEC (Founders, or Existing Companies), passionately believe they have created right solution. They believe there is no reason to interview potential investors. They are focused on building the solution and selling it. Their passion results in them being unable to listen to, and understand, what the investors are saying.
  • The FEC believe any sales and marketing problems can be fixed by changing the sales deck and changing the website.
  • The FEC are passionate they have the right solution. Hearing brutal feedback from potential investors requires founders who are self-confident, self-aware that they don’t have all the answers, and have the ability to learn and adapt.  I’ve observed many people who are not able to learn and adapt.
  • The FEC lack the personality and skills to contact a large number of strangers to setup and conduct interviews.
  • Doing interviews appears to be lack of progress. Building a solution is more fun and appears to be progress.

Conclusion

You will fail if your investors do not believe your solution addresses their individual key needs.

 Footnotes:

1 “What is a business model canvas?”  The following is a link to my article https://koorandassociates.org/tools/what-is-a-business-model/

 

 

Tom Koor

Do you have product/market fit? (V2)

How do you know you have product/market fit?

You have product/market fit if:

  • Your customers are so delighted that they are recommending it to others.
  • Your customers would be extremely disappointed if your solution disappeared.
  • Your customers can describe the big problem they had and the big benefit they achieved from your solution.
  • There is clear demand in the market place for your solution.

You do not have product/market fit if:

  • Your customers are not recommending you to others.
  • Your customers would not be extremely disappointed if your solution disappeared.
  • You customers cannot describe the big problem they had and the big benefit they achieved from your solution.
  • The marketplace is not demanding your solution. You have to persuade/educate your customers that they have a big problem with a big opportunity.
  • You are not clearly and obviously differentiated from competitors in terms of the value customers achieve. Your only differentiation is price.

 How do you measure product/market fit?

The single most important question is asking  “Would you recommend our solution to others?”  (Follow on questions could be “If so, why?  If not, why not?”) This metric is known as NPS (Net Promoter Score).  What is your NPS? Above 0 is good. Above 50 is excellent. Above 70 is world class. How do you compare to your industry and competitors? What has been your NPS trend?  You can find links to more information about NPS in the Further Reading section at the end of this document.

A more detailed question for customers would be (Sean Ellis developed this). “How would you feel if you could no longer use our product or service?”

  • Very disappointed.
  • Somewhat disappointed.
  • Not disappointed – it’s not really that useful.
  • I no longer use.

At least 40% of your target customers must say “very disappointed”.  If it’s less than 40% you need to reposition/change your product.  One approach can be to segment the answers to find a customer segment where the response is above 40%.

You must understand the group above 40%.  The five questions to ask them are:

1) who are you (demographically)?

2) why did you seek out our product/service?

3) how are you using our product/service?

4) what is the key benefit you’ve achieved?

5) why is that benefit important?

How large is your TAM, SAM, and SOM?

Having the facts to demonstrate that you have product/market fit is not enough to make the decision to invest capital to grow your business.  You need to have facts regarding your TAM, SAM, and SOM.

What is TAM (Total Addressable Market)?

What would be your company’s revenues with your current solution if 100% of the global customers demanding a solution to their problem bought your solution? You would have no competitors.  The focus here is on your current solution, not the solution you might have in five years time.  Note the phrase “demanding a solution”.  You must not include in TAM ghost customers who are not demanding a solution.

Is your TAM large enough consider growing your business? For example, the global smart phone TAM is huge, but the global TAM for smart phones that have a keyboard is tiny.

What is SAM (Serviceable Addressable Market)?

This is the portion of the TAM that is within the reach of your distribution channels and partners, and your ability to deliver and support your solution. Geography may be a constraint.  This still assumes 100% market share of those customers demanding a solution.

How will your customers connect with you?  If they are seeking a solution, how will they find you?  How will you make customers aware of your solution?  How will your customers and you connect?

What is SOM (Serviceable Attainable Market)?

SOM will be lower than SAM for two reasons: you may have competitors, and every customer who is demanding a solution may not actually buy a solution.

How do your customers perceive your competitively differentiated value proposition?  How hard is it for a competitor to copy your solution or to provide a better value proposition to your potential customers?  What is your retention rate and your churn?

Will you company make money?

You must now build a cash flow financial model for your company, to determine if your business will make money. Some of the components of the model include:

  • Current results and future targets for TAM, SAM, and SOM.
  • LCV (Lifetime Customer Value).
  • CAC (Customer Acquisition Costs).
  • Costs to deliver and enhance the solution. Many startups overlook the ongoing need to enhance the solution by fixing bugs, keeping pace with evolving customer needs, and staying ahead of the competition.
  • Financial costs and investor exits.
  • The costs of acquiring, retaining, developing, and exiting. Talent is the greatest challenge.  Unlimited capital is available for a successfully growing business.  Quality talent is the scarcest resource.

My Observations:

  • Most startups don’t actually achieve product/market fit with a large TAT, SAM, and SOM.
  • Many startups are not able to successfully scale, because the founders are unable to transform the company and themselves.
  • Many existing large companies have lost product/market fit and are in a fight to survive, often with declining TAT, SAM, and SOM. These companies don’t recognise they are in this situation and devote the bulk of their resources to resolving secondary issues, leading to decline.

Your next steps, regardless if you’re a startup or a long established company:

  • Document the facts and assumptions regarding product/market fit, TAM, SAM, and SOM.
  • Validate assumptions, resulting in facts. It is critical that product/market fit is based on facts rather than dreams and hopes.
  • Build your cash flow model.
  • Do all of the above in the context of a documented value proposition and business model. The further reading section contains links to workbooks from MaRS, which will guide you through the documentation.

Further reading

The Net Promoter Score concept was initially developed by Bain.  The following is a link to the Bain website homepage for Net Promoter Score, which contains several short articles:

http://www.netpromotersystem.com/about/why-net-promoter.aspx

The following is a quick overview of using Net Promoter Scores:

https://www.forbes.com/sites/shephyken/2016/12/03/how-effective-is-net-promoter-score-nps/#1b1391b423e4

Business Model Design Workbook from MaRS:

https://learn.marsdd.com/wp-content/uploads/2012/12/Business-Model-Design-WorkbookGuide.pdf

Crafting your value proposition Workbook from MaRS:

https://learn.marsdd.com/wp-content/uploads/2012/12/Crafting-Your-Value-Proposition-WorkbookGuide.pdf

 

Tom Koor

How do you determine employee talent requirements?

If you don’t have the right talent, your company cannot survive or prosper.  You cannot put in place talent recruitment, development, compensation, and exit plans until you know what the talent requirements are.

This document focuses on management and staff, excluding the board of directors, founders/C-Suite, and advisory board. The following is a broad framework.  You need to customize it for your specific situation.

To succeed, a company’s target customers must perceive they are obtaining competitively differentiated value over time.

The four 4 questions you must answer are:

#1 What is that competitively differentiated value?

#2 Which components of the business framework1 are required to deliver that value?

#3 What roles are required, and how will each role help deliver that value?

#4 What are the characteristics of the person in that role?

The answers to the 4 key questions depend upon the specific situation of the company.

Where is the company now, what’s the future direction, and what are the upcoming challenges? Some of the possible situations include:

Startup has no MVP2 (Minimum Viable Product) yet, is targeting a major market, and hopes to grow to 100+ employees.

#1 What is that competitively differentiated value?

At this point the founders are still figuring this out.

#2 Which components of the business framework1 are required to deliver that value?

The startup is focused on just a few components of business framework, and only a few pieces of the business model – who are target customers, what are their needs?

#3 What roles are required, and how will each role help deliver that value?

There are no detailed role descriptions. Everyone working on everything.

#4 What are the characteristics of the person in that role?

Everyone must be comfortable in chaos, dealing with daily new problems, have the ability to make rapid personal changes, and be relentless in overcoming obstacles.

Startup, has Product/Market Fit3, a small niche market, and will grow to a handful of employees.

#1 What is that competitively differentiated value?

The founders have determined this.

#2 Which components of the business framework1 are required to deliver that value?

The founders have identified and documented this.

#3 What roles are required, and how will each role help deliver that value?

There must be clearly defined roles for a stable business. The days of chaos should be over.

#4 What are the characteristics of the person in that role?

What are the necessary skills, experience, values, morals, and ethics to carry out that role?  Each person must have the ability to learn and change over time as the company continues to evolve.

Large company, with Product/Market Fit.

#1 What is that competitively differentiated value?

This must be documented.

#2 Which components of the business framework1 are required to deliver that value?

All the components are required for continued success.

#3 What roles are required and how will each role help deliver that value?

For each role, there must be a clear definition of the future challenges, issues, changes, obstacles to overcome and expected outcomes for that role.

#4 What are the characteristics of the person in that role?

Focus on the skills, experience, values, morals, and ethics to carry out the role.  Every company has a small number of roles that enable the bulk of competitively differentiated value. These roles are not based on management hierarchy.  You must identify and target these roles.

Large company that has lost Product/Market Fit, the market is shrinking, there is intense competition, and the company must be transformed.

#1 What is that competitively differentiated value?

At this point the company does not have competitively differentiated value with a large percentage of customers recommending the company to others. The leadership must rethink who the target customers are, what their problems are, and how the company can provide a solution which solves those problems.   In some cases, such as many paper-based publications, there is no future value and the company will disappear at some point.

#2 Which components of the business framework1 are required to deliver that value?

All components are required. It’s likely all components will undergo major changes.

#3 What roles are required, and how will each role help deliver that value?

First there must be the right board of directors and CEO.  The current board and directors got the company into this situation.  Leadership transformation begins at the top.

#4 What are the characteristics of the person in that role?

The board of directors and CEO are dealing with the same issues as an early stage startup.  Everyone must be comfortable in chaos, dealing with daily new problems, have the ability to make rapid personal changes, and be relentless in overcoming obstacles.

Some of the challenges in determining talent requirements include:

#A Many large companies do not realize they no longer have Product/Market Fit, and are hiring the talent based on invalid historical requirements.

#B Many startups attempting to scale don’t understand that the talent that got the company to this point is not what is going to help them create a successful future

#C Many startups simply do not have the CEO and founder talent to succeed. There is some combination of the founders: not understanding the customers problems, not understanding what solution is required, and not able to attract the necessary talent and help that talent work together.

Your next steps:

Define your current situation, based upon facts.  Your advisory board can challenge your thinking and help you understand your company’s situation.

Footnotes

1 Business Framework has inter-related 10 components:

#1 What can only the CEO do

#2 Company purpose

#3 Values, morals, and ethics

#4 Customer perceived value proposition

#5 Business model

#6 Talent management

#7 Capital and cash management

#8 Investor management

#9 Exit management

#10 Governance

2 A product or service with just enough features to delight early customers, and to provide feedback for future development.

3 Product/Market Fit.  Marc Andreessen’s definition of product/market fit:

“The customers are buying the product just as fast as you can make it — or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account. You’re hiring sales and customer support staff as fast as you can.” On product/market fit for startups

 

 

 

Tom Koor

How to assess director and CEO candidates – regarding values, morals, and ethics. (V2)

There have been numerous corporate scandals, with questions as to “where were the directors?”  It is up to each board to establish a common understanding of, and commitment to, what they mean by values, morals, and ethics.  Based on this common understanding, the board can then assess director and CEO candidates. This document is a tool designed to enable discussion leading to that common understanding

This tool does not provide any recommendations or advice as to what are appropriate values, morals, and ethics. The focus on possible behavioural questions (i.e., can be confirmed via reference checking) to ask director and CEO candidates.  Skills or functional competencies are not addressed.  Each board should identify additional questions.  This tool is illustrative and not intended to be a comprehensive set of questions.

The nomination committee/board should have a discussion on each question and document:

  • What might be good, OK, or unacceptable answers.
  • Which answers would eliminate the candidate from further consideration.

Directors and the CEO should be passionately committed to the purpose of the company

What is the purpose of the company? Why does the company exist? The description of the purpose of the company should be positive and outwardly focused on how you benefit customers and society.  For example, Nike’s “authentic athletic performance,” rather than “sell lots of shoes made in China.”  Is the purpose of the corporation to make as much money as possible? How should the company benefit society?  Or, should it?

Larry Fink, in his 2018 letter to CEOs, said “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate…..Without a sense of purpose, no company, either public or private, can achieve its full potential…..And ultimately, that company will provide subpar returns to the investors.”1

The passionate commitment to purpose will set the tone from the top and quickly percolate throughout the company.  The purpose is the foundation upon which values, morals, and ethics are based.

I do not have any suggestions as to how to assess a candidate’s passionate commitment to purpose.  It will be clear within a year if a director or CEO doesn’t have passionate commitment to the purpose – which presents a major decision for the board to make.

Which director decision has the greatest impact on long-term corporate value?

Many would advocate this decision is the appointment (or termination) of the CEO.  Let’s first consider some possible questions to ask each director candidate who would have to vote on CEO appointment or termination.

  • What is the most senior level position you have terminated?
    1. Why? Performance (i.e. impact on profit or value creation and preservation)? Non-compliance with laws, regulations or company policies? Ethics or values?
  • Looking back over your career, what’s an example of person you decided not to hire or promote, due to ethics or values?
    1. What were the ethics and values issues?
  • What is the most senior level person you either appointed or recommended for appointment?
    1. What were the three most important reasons for that decision?
  • As you look back over the people you have appointed or recommended for appointment, what was your greatest mistake? How did you determine it was a mistake?  How did your correct your mistake? What have you done differently since then, when appointing people, or recommending appointments?

Now, let’s look at the values, morals, and ethics questions that you could ask of both director and CEO candidates:

  • What is the most courageous business action you’ve taken, and what was the impact on company profit, your career, and your family’s financial situation?
  • What was the most difficult ethical business decision you have made, and what was the impact on company profit? What definition of ethics did you have in this situation?
  • What has been the greatest crisis you have had to resolve? What was your role?
  • When dealing with an issue, what is an example of how your probed deeper into the company to understand the causes of the issue?
  • What is the biggest issue or problem you’ve encountered where you wished you’d informed the board earlier?
  • What was the most significant issue regarding ethics, values or morals, which a subordinate or colleague brought to your attention? How did you deal with it?

The following questions address the beliefs a candidate has:

  • Should a company invest in a country, or have operations in a country, in which:
    1. Child labour is common.
    2. The rule of law does not apply i.e., the government or highly placed individual are not subject to the laws, and the judiciary is not independent.
    3. The press is not free.
    4. Doing business requires payments to government officials or other highly placed individuals.
    5. The government is not elected in a freely democratic process.
  • Should the company arrange its legal structure to minimize taxes, ideally to pay no taxes?
  • Should the company lobby governments to change laws to reduce company taxation?
  • What would be your answers for the first three questions if the country in question was your home country, such as Canada? If your answers differ, why do they differ?

 Footnotes:

1 https://corpgov.law.harvard.edu/2018/01/17/a-sense-of-purpose/

Tom Koor

Leadership talent is the underlying cause of startup failure.

There is some debate regarding the relative importance of the idea vs talent.  Talent is the most critical.  It is the talent which: comes up with the idea, changes the idea as learning more about the customers, and successfully grows a profitable company.  Lots of people have ideas.  Few people can successfully achieve results.

 Founders are often the cause of start-up failures:1

65% of the failures of high-potential start-ups are due to people problems: relationships, roles and decision-making, and splitting the income. More than 50% of founders are replaced as CEO by the third round of financing.  In 73% of these founder replacements, the CEO is fired rather than voluntarily stepping down. The founder’s passion, confidence, and attachment to the start-up is initially a great strength. Founders often refuse to revise their strategy and business model, underestimate and misjudge the need for additional skills, and make decisions that don’t reflect the current situation.

 The top nine reasons for start-up failures were identified by CB Insight:2

( I’ve shown below my point-of-view as to why leaders and leadership were the root cause.)

  • 42% no market need – not obtaining facts as to customers and their needs.
  • 29% ran out of cash – poor management of cash flow and poor reputations with investors.
  • 23% not the right team – unable or unwilling to assemble the right team.
  • 19% get outcompeted – not aware of the competition and customer needs.
  • 18% pricing/cost issues – not aware of customer needs and the competition.
  • 17% poor product – poor ability to design and build a product meeting customer needs.
  • 17% need/lack business model – not understanding a business model is needed, or unable to define one.
  • 14% poor marketing – poor marketing skills.
  • 14% ignore customers – clearly a leadership problem.

 Why do companies find themselves in crisis?

“The assumptions on which the company has been built and is being run no longer fit reality.”3

 Major business changes almost always fail:4

  • Major changes almost always fail. 12% of change programs succeed.
  • 38% produced less than half the expected results.
  • 50% diluted the value of the company.

Most venture capital backed start-ups will fail5.

  • Three quarters of VC backed firms in the U.S. don’t even return all the investors capital..

Your next steps

To enable discussion with your board of directors, C-Suite, and advisory board, download the following one-page slide:

Leadership talent is the underlying cause of startup failure

Footnotes:

1 “The venture capital secret: 3 out of 4 start-ups fail”, Deborah Gage, Wall Street Journal Small Business, September 19, 2012  discusses research by Shikhar Ghosh, Harvard Business School

2 “Top 20 reasons start-ups fail”, CB Insights, Oct 7, 2014

3 Peter Drucker, Harvard Business Review, November 2009, Page 90

4 “It’s 8-to-1 against Your Change Program”, Bain website, Managing Change Blog, 2017 June 23

5 “The Founder’s Dilemmas”, by Noah Wasserman

Tom Koor

Startups often fail in the transition to scaling.

Startups often fail in the transition from product/market fit to successful scaling, because the talent requirements are different.  The problems faced by leaders in those two situations are very different.  Many leaders are not able to transition.

Getting to product/market fit requires a small team making constant changes to build a product which delightfully solves urgent customer problems:

  • CEO focus on building a delightful product.
  • Everyone does everything. There are no full-time managers.
  • Doing things that don’t scale and are inefficient.
  • Limited management processes.
  • Key metric is customer satisfaction.
  • Heavy investment in engineering.
  • With an engineering team of less than 6 people, the CTO (Chief Technology Officer) spends most of their time coding.
  • There are lots of coding, technical, architectural issues and decisions.

 Being ready to scale requires an architected business and suite of with supporting processes and technology, able to efficient roll out an evolving solutions which will change the world:

  • CEO focus on building talent and a company.
  • Management structure in place. Roles and responsibilities defined.  Fewer generalists, and more specialists.  Full-time managers.
  • Focus on efficiency in order to profitably scale.
  • Management processes and supporting technology in place, especially for talent acquisition, development, and retention.
  • Decision-making drive by several key metrics.
  • Heavy investment in marketing and sales.
  • CTO no longer coding most of the time – may be a full-time manager.
  • Broad set of issues and decisions.

The CEO must do what only the CEO can do, and must not delegate:

  • Creating and maintaining purpose and alignment.
  • Hiring a leadership team and making sure they work well together.
  • Nurturing the company culture.

 Your next steps

To enable discussion with your board of directors, C-Suite, and advisory board, download the following one-page slide.

https://koorandassociates.org/points-of-view/startups-often-fail-in-the-transition-to-scaling/

Tom Koor

When do startup get capital from outside investors? (V2)

This is an update to my 2019 Feb 22 survey, with additional findings and insights.

I did a survey of founders and CEOs of  startup software companies.  I asked them the question: When did you get outside investors, excluding friends and family?  After you had some satisfied customers who provided some revenue?  Before?  At some later stage of your company?

The key learning is that there are many paths to growing a software company

There were a total of 17 responses.  11 raided money from outside investors once they had a MVP (Minimum Viable Product) with some satisfied customers and some revenue, 3 never raised capital from 3rd party investors to grow into significant sized companies.  3 raised money before they had any customers. Two of these conducted large numbers of interviews of potential customers (in one case, 300 individual documented interviews in one year).

Investors told me that they did invest in pre-revenue and pre-customer companies.  These were clean technology, medical technology, pharma, quantum computing, etc. i.e. not software companies.

Every investor told me that they don’t invest in the idea.  They invest in the people.  i.e. The world is filled with people with ideas, but there are few people that can actually create something.

Tom Koor

What are the decision-making challenges faced by directors? (V2)

Directors face five challenges in making decisions:

#1 Have the directors agreed upon which decisions are most critical, and agreed upon the criteria for selecting those decisions?

  • Is the criterion: what has the greatest impact on long-term value creation and preservation?
  • Are the critical decisions: setting the strategy; hiring/terminating CEO; approving CEOs strategic implementation plan; monitoring results of executing the CEOs plan?

#2 Do the directors understand the company?

A McKinsey survey of directors1 revealed:

  • 34% agreed their board fully comprehended strategies.
  • 22% said boards completely aware of how firms created value.
  • 16% said boards had strong understanding of industry dynamics.

#3 Does each individual director have the qualifications to make each critical decision?

  • What have been each director’s past experiences in making each critical decision?
  • What is each director’s relevant knowledge and experience regarding the industry, company strategy, and how the company creates value?
  • What have been the past outcomes of each director assessing and selecting advisors?
  • What are the value, morals, and ethics of each director?
  • Do the directors have the interest, ability, and commitment to understand the company and its industry?

#4 Is there an effective board decision-making process?

  • A McKinsey survey of executives2 revealed 28% of executives thought good strategic decisions were frequent.
  • Critical decisions are complex emotional, social, and political processes. Do the directors understand the typical flaws, and take mitigating actions?

#5 The director selection process is almost always flawed.

  • Directors are ultimately responsible for the long-term success of the corporation.3
  • The vast majority of public company directors fail to achieve long-term success.

Mark Leonard, CEO of Constellation Software, in his final annual CEO letter said:  “Qualified and competent Directors are very rare, and not surprisingly, the track record of most boards is awful. According to the 2017 Hendrik Bessembinder study of approximately 26,000 stocks in the CRSP database, only 4% of the stocks generated all of the stock market’s return in excess of one-month T-Bills during the last 90 years. The other 96% of the stocks generated, in aggregate, the T-Bill rate over that period. This means that 4% of boards oversaw all the long-term wealth creation by markets during that period. Even more disturbing, the boards for over 50% of public companies saw their businesses generate negative returns during their entire existence as public companies.”    http://www.csisoftware.com/wp-content/uploads/2018/04/Presidents-Letter-April-2018-Final.pdf

Few major companies survive for the long-term:

  • 16% of major companies in 1962 survived until 1998.4
  • Of the 500 companies in the S&P 500 in 1957, only 74 remained on the list in 1997. Only 12 of those 74 outperformed the 1957-1997 S&P index.  An investor who put money into the survivors would have done worse than someone who invested only in the index.4
  • 31% of Fortune 500 companies went bankrupt or were acquired from 1995 to 2004.5
  • 52% of Fortune 500 companies went bankrupt, were acquired, or disappeared between 2000-2015.6
  • 50% of the S&P 500 will not be on the list in 10 years’ time.7
  • Three-quarters of VC-backed firms do not even return all of the investors’ capital. Over 95% do not meet initial projections.8

Why are there so few qualified directors?

The background of many directors does not qualify them to make board-level decisions in today’s rapidly changing world.

  • Many directors are business executive who were not CEOs or members of the C-suite. They were successful because they rose through the ranks of existing companies.  They never had to make company-wide decisions.
  • Some directors are consultants, academics, and others who have never had major P&L or operational accountability.
  • I wonder about why directors who are not qualified to occupy C-suite positions are qualified to make decisions such as whether to: hire a CEO or fire a CEO; sell the company; approve or reject the CEO’s strategy or budget, etc.

Your next steps:

  • To enable discussion with your board and management, download the following one-page PDF.

What are the decision-making challenges faced by directors?

  • Does each director state the board is ultimately responsible for the long-term success of the company? If the board does not agree on this, proceed no further.
  • Document which are the critical board decisions.
  • Define the value creation matrix: what skills, experience, values, morals, and ethics are required to make each of those decisions.
  • Assess each director and remove the unqualified directors immediately, or at the next annual general meeting.
  • Assess future director candidates using the value creation matrix.

This process must be repeated yearly.  In today’s fast-changing world, yesterday’s solutions are not always appropriate for tomorrow’s problems.  Remember: innovation, agility, and transformation start at the top – at the board.

 Footnotes

1 “Corporate Boards need a facelift”, Eric Kutcher, McKinsey, May 04, 2018

2 “The case for behavioural strategy”, McKinsey Quarterly, 2010 Number 2

3 Professor Didier and Estelle Metayer, “Does your board really add value to strategy?”, IMD, Global Board Center, https://www.imd.org/research-knowledge/articles/board-strategy/

4 “Creative Destruction – why companies that are built to last, underperform the market”, by Richard Foster & Sarah Kaplan

5 “Unstoppable” by Chris Zook, 2007, page 7

6 Accenture 2016

7 “2018 Longevity Report” by Innosight Consulting

8  Deborah Gage, “The venture capital secret: 3 out of 4 start-ups fail”, Wall Street Journal,  https://www.wsj.com/articles/SB10000872396390443720204578004980476429190, September 19, 2012

Tom Koor

How to start an advisory board

1      What is the purpose of this document?

2      What is the value of an advisory board?

2.1       What is an advisory board?

2.2       How is an advisory board different from a group of advisors?

2.3       How do you measure advisory board value?

2.4       What are the major benefits of an advisory board, as perceived by companies with advisory boards?

2.5       Who has advisory boards?

2.6       How do you recruit advisory boards?

2.7       How do you organize an advisory board?

3      Do you have the capability for an advisory board?

3.1       The CEO has time available

3.2       The CEO has a plan with milestones

3.3       The CEO has a cash flow forecast, budget, and tracking process.

4      How do you get people to serve on your advisory board?

4.1       Document the initial set of mutual expectations

4.2       Send a formal invitation letter to the advisor candidate.

4.3       Invite the best people.

4.4       Advisors may change over time.

5      Sample advisory board invitation letter.

5.1       Your company letterhead.

5.2       Start out with your ask.

5.3       Pitch What are the benefits to this advisory board member?

5.4       Overview of the Company – 1-2 sentences per topic area.

5.5       Advisory board’s mandate and focus – What are the advisory board’s goals?)

5.6       Responsibilities of board members.

5.7       (Close and thank you)

6      Follow Up Your Board Invitation Letter.

7      First meeting of the advisory board.

7.1       Plan the First Meeting Agenda Around a Problem or Discussion Topic.

7.2       Gather the Relevant Background Material

7.3       Create the Meeting Agenda.

7.4       Make Arrangements for Recording the Meeting Minutes

7.5       Provide refreshments

7.6       What might an agenda look like?

7.7       Begin Future Meetings With a Review of Previous Minutes

8      Footnotes

 

1       What is the purpose of this document?

This document outlines how to create an advisory board and the agenda for the first meeting.  This document must be adapted and revised for you specific situation.

The audience for this document is CEOs and founder

 

2       What is the value of an advisory board?

Advisory boards have a major impact on sales and productivity, comparing the three years after an advisory board vs the three years before an advisory board:  sales growth of 67% vs 23% and productivity growth of 6% vs 3%.1

2.1      What is an advisory board?

A group of independent people who advise the CEO (or board of directors) on specific problems and meet on a regular basis.  The advisory board has no voting authority and company has no legal obligation to follow advice.

The board is independent.  Ideally the advisors have no other business arrangement with the company other than being on the advisory board.  If the advisors have other financial arrangements, their advice may be biased.

2.2      How is an advisory board different from a group of advisors?

Every CEO/Founder has informal advisors.  The advisors know little or nothing about the company, answer very specific pointed questions and devote little time to the company. The engagement with the CEO/Founder is sporadic and ad-doc.

An advisory board has scheduled involvement with the CEO/Founder.  The advisors have an understanding of the company based upon their ongoing involvement as well as the information provided to them by the CEO/Founder.  The advisors have made a long-term commitment of time to the company, a few hours a month or more.

2.3      How do you measure advisory board value?

There can be two sets of “hard metrics”, especially if it is possible to compare the times before and after the advisory board creation, as well as comparison of any improvements relative to industry benchmarks.

  • What is the impact on sales, earnings, and productivity?
  • What is the impact on key business milestones, growth, and innovation?

It can be difficult to establish a direct cause-and-effect relationship between the advisory board advice and business results.  A key indicator can be whether or not the advisory board impacts the decisions made by the CEO (or by the board of directors).

2.4      What are the major benefits of an advisory board, as perceived by companies with advisory boards?

85% of business leaders believe that the advisory board had a significant impact on success.2

Some of the benefits, according to business leaders (rating on a scale of 1 to 10):3

  • Is an essential tool 8.2
  • Allows you to develop a broader vision 8.0
  • Improves strategic business choices 8.0
  • Forces management to look at the company 7.5
  • Challenges the company’s management team 7.5
  • Puts in place a better management structure 7.4
  • Brings rigour in to the company 7.2
  • Reassures shareholders and investors 7.2
  • Avoids costly mistakes 6.7

What are some of the impacts of an advisory board, according to the business leaders (on a scale of 1 to 10):4

  • Company vision 7.7
  • Innovation 6.9
  • Risk management 6.8
  • Profitability 6.8
  • Survival 6.6
  • Sales growth 6.6
  • Hiring the best employees 6.2

2.5      Who has advisory boards?

  • 75% of SMEs (Small Medium Enterprises)5 have no board. 19% have a board of directors only. 6% have an advisory board (Half of those also have a board of directors)6
  • 11% of companies with more than 100 employees have an advisory board.7

2.6      How do you recruit advisory boards?

56% of the advisories come from the company’s network, 8% from external recruiting such as associations, only 3% from company’s financial institution or investors.8

2.7      How do you organize an advisory board?

  • You need to determine the skills and experience required on your advisory board. Look at your 2-5 year business forecast.  What are the opportunities and challenges over that time-horizon?  What is the talent (skills and experience) you need?  What are the talent gaps when you look at the management team (and board of directors) What is the talent you need on your advisory board?
  • The written advisory board mandate must have the objectives, terms of reference and time commitment. Each advisor commits to reading preparatory documents, actively participating in the meetings and follow-up.  The mandate also addresses advisor out-of-pocket expenses and compensation (if any). If business development is a role, then there can be performance bonuses based on business development results.  The mandate may be the set of mutual expectations i.e. expectations of the CEO/Founder and of the advisors.
  • The mandate must be clear – are the advisors expected to act in the best interests of the owner(s) or the best interests of a broader set of stakeholders? For example, a recapitalization could provide capital to the owner but risk the long-term viability of the company.
  • It must be clear how the company and advisory board interact. (e.g. meetings only with the CEO or including C-Suite members?  Are all questions (from management and advisors) funneled through the CEO?  The advisory board may meet weekly, monthly, quarterly as well as urgent ad-hoc meetings.
  • Is there an advisory board chair? If so, the role of the chair is crucial, working with management, the board of directors, and the advisory board members.
  • The individual advisor roles must be clear, e.g. help develop business by opening doors, act as a company ambassador at social events, etc.
  • Individual advisors bring specialized experience, knowledge and contacts which the board of directors does not have. The advisor capabilities are not a replacement for capabilities which should be on the board of directors or management, but rather be complementary.
  • Each advisor must also have a degree of passion and interest in the business.
  • The advisory board has simpler processes than a board of directors, does not require elections, term limits, committees, public disclosure, etc.

3       Do you have the capability for an advisory board?

You have three pre-requisites for your creation of an advisory board.  Much of the focus is on having the documented thinking of the CEO/Founder and documented company plans and results.  If there are no documents, then its too early for an advisory board.  The CEO may have advisors with whom she has an ad-hoc relationship.

3.1      The CEO has time available

The CEO has the time to prepare for meetings, have the meetings, and follow-up from the meetings.  This implies that there are enough team members to allow the CEO to delegate some of her work.  If the company consists of one sole founder, then it’s too early for an advisory board.

3.2      The CEO has a plan with milestones.

The CEO must have a documented set of future milestones.  There is a least an assumption of the company’s future path.  If the CEO has not documented what the company will be achieving in future, it’s to early for an advisory board.  The role of an advisor is not to document where the company is going.

The advisor will help the CEO think through how to achieve critical milestones.

3.3      The CEO has a cash flow forecast, budget, and tracking process.

The cash flow forecast, budget, and tracking process is directly tied to the set of milestones.  There must be a set of documented assumptions as to what resources are required to achieve milestones.  If the CEO has no documented set of assumptions as to the cash required to achieve critical milestones, it’s too early for an advisory board

4       How do you get people to serve on your advisory board?

When talking with prospective members, focus on two things:

  • The impact the advisor will have on the CEO/founders and on the company. People won’t want to be an advisor if they are asked for advice on minor issues and if the CEO/Founder regularly ignores most of the advice.
  • The benefits to the advisor of being on an advisory board, which could include:
    1. Learning new ideas and getting new perspectives.
    2. Expanding their network.
    3. The personal satisfaction of helping a CEO/founder and company succeed.
  • Compensation is not a reason people join an advisory board. If the advisor puts in significant time or when the company goes beyond the startup stage, then compensation is warranted.

Advisors come from the CEO/founders network.  The network may also suggest advisors.

4.1      Document the initial set of mutual expectations

Document the initial set of mutual expectations:

  • What expectations the founder(s) have of the advisory board and of each advisor. E.g.
    1. Hours per month?
    2. Meetings during the business day? During evening? During weekend?
    3. In person meetings or via Skype?
    4. Reading material before each meeting?
    5. Any follow-up from meetings?
    6. Responding to emails and phone calls between meetings?
    7. Investing in the company?
    8. Doing introductions: to potential customers, partners, suppliers, employees?
    9. Represent the company at social events?
    10. Attend meetings with founders?
    11. Attend meetings with potential customers, suppliers, partners, employees?
    12. Attend internal project meetings?
    13. Review and comment on material produced by the company?
  • What expectation each advisor has of the founders.
  • Expectations may be different for each individual advisor

4.2      Send a formal invitation letter to the advisor candidate

The letter needs to include:

  • A brief overview of the company
  • The advisory board’s mandate and role.
  • the responsibility of the advisors and the time commitment expected (how often the board will meet and for how long)
  • Why you think the person would be a great addition
  • The specific contribution the person would make.

4.3      Invite the best people

You have identified the capabilities you need on your advisory board.  Invite the best people you know.  If they are not part of your network, ask someone in your network for an introduction.  You can also cold call them.

4.4      Advisors may change over time

The advisors you have when you are pre-seed with no satisfied customers and no revenue may be different from the advisors you have when you are a global unicorn about to do an IPO

5       Sample advisory board invitation letter

The following draft invitation letter must be sent after you’ve connected with a prospective advisor and have drafted a draft mutual set of expectations.  Note that there is a fixed time frame for the appointment.  The CEO/founder may at any time for any reason end the appointment of the advisor to the advisory board. The letter must be customized for each advisor.

5.1      Your company letterhead

(Prospective Board Member’s Name and Address)

(Date)

Dear (Board Member’s Name):

5.2      Start out with your ask

I’m pleased to invite you to become a member of the FastGrowth Business Advisory for 20__ – __.

5.3      Pitch What are the benefits to this advisory board member?


FastGrowth is one of the AR (Augmented Reality) industry leaders. You have the opportunity to shape the global growth of this industry and literally change how humanity views the world.

FastGrowth is entering the next stage of its business evolution. Growing from 10 to 50 employees in the next 24 months requires reinvention of every aspect of the business: talent, technology, and processes.

Your experience and insight would be the perfect person to help me think through the critical changes and deal with the issues.

I will cover nominal expenses you incur from attending advisory board meetings such as parking.  I don’t expect you to fly in for the meetings.

5.4      Overview of the Company – 1-2 sentences per topic area

FastGrowth was founded in 2014. Currently,

Target customers are …….

Their problems are ….

Our solution is ……….

In 24 months,

Target customers will be ………….

Their problems will be ………….

Our solution will be ……………

 

5.5      Advisory board’s mandate and focus – What are the advisory board’s goals?)

The main purpose of FastGrowth’s Business Advisory Board is to provide management advice about the direction the company should follow. Specific goals for this year are how the company can get ready for Series B funding and manage the deployment of those funds.

5.6      Responsibilities of board members

The Board will have an initial face-to-face 2-hour meeting.  Subsequently, there will be a monthly 1-hour conference call, with a 2-hour face-to-face meeting quarterly.  Your time commitment is approximately 5 hours per month.  You will also need to sign a confidentiality agreement.

5.7      (Close and thank you)

Thank you for considering being a part of FastGrowth’s Advisory Board. I will call you within 7 days. I’m available to discuss any questions you may have. You can reach me by phone at (phone number) or via email at (email address).

Sincerely,

(Your signature)

Name
Title

 

6       Follow Up Your Board Invitation Letter

Follow up your letter with a phone call. If your prospective advisory board member does not have time to talk with you, they will not have time to be on your board.

7       First meeting of the advisory board

7.1      Plan the First Meeting Agenda Around a Problem or Discussion Topic

Your first meeting, therefore, like all your Advisory Board meetings, needs to be planned around a question or problem. You might find it easiest to ​state the problem as a goal. For instance, “We want to raised Series B funds in 9 months time. How might we do this?” Or there may be a general topic “How can we cut our business costs?”

7.2      Gather the Relevant Background Materials

  • Once you’ve decided on the discussion topic, it’s time to gather the materials that your Advisory Board members will need to read before the meeting.
  • Because this is the first Advisory Board meeting, you should include a business plan and any other documents pertinent to the discussion topic, such as charts, graphs and fact sheets illustrating the background of the discussion topic.
  • You should send a copy of these documents to all Advisory Board members one weeks in advance, along with a copy of the agenda. You can distribute material by providing the Advisory Board with access to an online data room.  Later stage companies should use a Board of Directors software packing to manage information distribution.

7.3      Create the Meeting Agenda

  • Below is an example of a first meeting agenda (with comments for running the meeting efficiently) that you need to revised and adopt for your first Advisory Board meeting.
  • Each agenda item is timed; building a time schedule into your meeting and sticking to it ensures that your meeting doesn’t get bogged down and stimulates on-topic discussion.
  • There is no presentation of the pre-reading material. The focus on the meeting if the CEO/Founder learning from the group discussion.
  • Every advisory board meeting must start with the CEO/founders 1-5 minute pitch. The details supporting the pitch are available in the data room for the advisors.

7.4      Make Arrangements for Recording the Meeting Minutes

Make some arrangements for recording the minutes of the meeting. Don’t try to do this yourself; you need to be able to participate fully by listening and contributing. If you don’t have someone who can attend and serve as a secretary, ask an Advisory Board member to record the meeting.

The minutes are brief and capture:

  • What was the discussion topic?
  • What were the issues, challenges?
  • What were the decisions and next steps?

Lots of the discussion will be on flip charts, whiteboard, or electronic meeting software.  The minutes are not intended to capture every word said.

7.5      Provide refreshments

Provide beverage (coffee, tea, water, etc.). Food is required depending upon when the meeting is held, your advisors are busy people.  E.g. Early morning meeting – breakfast; Mid morning meetings – snacks; Mid day meeting – lunch; Afternoon meeting – snacks; Evening meeting dinner.

Food can be sandwiches, pizza etc.  You will have to learn any food allergies and preferences of your advisors.

7.6      What might an agenda look like?

The sample advisory board meeting agenda below includes suggested activities with notes to guide you through the meeting process. You will have to change this to meet your company’s specific situation

[Your Company Name]

Agenda

[Date]

[Location] 

Beginning/Ending Time Activity
7:00 – 7:05 am Introductions
(Assuming your Advisory Board members haven’t met, introduce yourself and all the Board members, giving a brief outline of their expertise.)
7:05 – 7:10 am Why an Advisory Board?
(A brief statement of how you see the Advisory Board operating and the contributions you hope the Advisory Board can make to your company. Include details such as how often the Board will meet.)
7:10 – 7:20 am Questions
(If there are any. If there aren’t, ask your Board Members how they see the Advisory Board operating and how they hope to contribute.)
7:20 – 7:25 am The CEO/Founder does her 1-5 minute pitch
Discussion Topic: [Insert Your Question/Problem Statement Here]
7:25 – 7:30 am Presentation of the Discussion Topic
(An outline of the history of the topic and how it’s presently affecting the company; refrain from giving your views/solutions at this point.)
7:30 – 8:35 am Discussion
(You want to keep the ideas flowing at this stage; don’t reject or dismiss ideas at this point. Do contribute your ideas/views, too.)
8:35 – 8:50 am Proposals/Resolutions
(Evaluating the ideas the group has heard and choosing the best “solutions”.)
8:50 – 8:55 am Summary
(Summarize the topic, the discussion, and the results for the group and tell them what you plan to do.)
8:55 – 8:58 am The CEO/Founder states what has been the value, if any, of the meeting]
8:58 – 9:00 am Schedule of future meetings
9:00 am Adjournment

 

7.7      Begin Future Meetings With a Review of Previous Minutes

The minutes are in the pre-prereading material.  The minutes will show unresolved issues as well as the CEO/Founders decisions and planned actions.  The review will update everyone on the outcomes of the decisions/actions.

8       Footnotes

Advisory Boards: An untapped resource for businesses  March 2014  Business Development Bank of Canada https://www.bdc.ca/en/Documents/analysis_research/bdc_study_advisory_boards.PDF

1 Page 1

2 Page 10

3 Page 9

4 Page 10

6 Page 6

7 Page 11

 

5 Industry Canada definitions (2018 May 9): Small business: < $5 million in revenue, < 100 employees; Medium business: between $5 million and $20 million in revenue, 100 to 499 employees.