Popular Articles

Sweet marketing music

Tanner Montague came to town from Seattle having never owned his own music venue before. He’s a musician himself, so he has a pretty good sense of good music, but he also wandered into a crowded music scene filled with concert venues large and small.But the owner of Green Room thinks he found a void in the market. It’s lacking, he says, in places serving between 200 and 500 people, a sweet spot he thinks could be a draw for both some national acts not quite big enough yet for arena gigs and local acts looking for a launching pad.“I felt that size would do well in the city to offer more options,” he says. “My goal was to A, bring another option for national acts but then, B, have a great spot for local bands to start.”Right or wrong, something seems to be working, he says. He’s got a full calendar of concerts booked out several months. How did he, as a newcomer to the market in an industry filled with competition, get the attention of the local concertgoer?

read more
by Andrew Tellijohn
September 2004

Related Article

New tricks

Read more

Boards

business builder boards  

It’s hard to cede
control, but directors
can help your firm

by Esperanza Guerrero-Anderson  

It seems inevitable that one day experts or investors start pounding on an entrepreneur’s door saying that to be successful, the owner needs to have a board of directors.  The evidence supporting the value of a board of directors is overwhelming and yet very few small entrepreneurial companies have one.

Sure, it’s painful for entrepreneurs to bring experienced people in to help them build their company.  Pride, independence and the desire to keep business secrets protected from strangers often prevent entrepreneurs from forming a board of directors.  That’s when it’s important to look at the situation from an outside perspective.

A board of directors can provide direction, strategy, experience, discipline, objective perspectives and access to outside resources.  If properly selected, the board’s expertise can balance the strengths and shortcomings of the entrepreneur.

Below is a checklist to help you decide whether a board of directors is right for your company and how to select members for your board.

• Make a list of your reasons for forming a board of directors and what you expect from the group.

• Examine other successful entrepreneurs in your community.  Ask them who helped accelerate their successes.  Get advice on what to expect and how much you should pay board members for their service.

• Educate yourself on how to effectively work with and use a board of directors; consider joining your local chapter of the National Association of Corporate Directors, attending seminars, reading articles and so on. 

• Realize that in order to retain good board members you have to provide them with a rewarding experience.

• Familiarize yourself with the Sarbanes-Oxley Act and consult your legal counsel.  Even if you are a small entrepreneurial company and are not subject to this regulation, you need to be aware of what is expected of directors. Directors are under increasing pressure to comply with new requirements and to devote more time and attention to being prepared.

• Create a list of the responsibilities and contributions you want members to bring to the board, you and your company.

• Assess your personal strengths and the strengths of your business team, from your lawyer to your accountant.  What’s missing?  Do you need expertise from different fields?  Do you need someone to open doors? 

• Avoid selecting individuals who might have a conflict of interest with your company as well as those who lack relevant experience or are over-committed.

• Interview each candidate separately. Try to learn how their experience is relevant to your objectives. Discuss your expectations. Agree on a fair time commitment and compensation.

• Take the time to check personal and business references of candidates. Check not only experience but also personal qualities and effectiveness as board members.

• Keep the board small; aim for no more than five members.  Appoint them for one-year terms so you can see how the group works together and how well you adjust to having others suggesting how you should conduct business.

• After selecting your board, you need to educate members about your business including your business model, how your company makes money, your priorities, your strategy, and so on.

• Compensate your board members. Start with a small retainer for the first year; for example, a small start-up company may give its board members $300 to $500 per meeting for the first year.  Then based on how effective the group is you can consider giving them stock options, but consult your legal counsel first. 

I am a strong believer in boards of directors. They create more work, tell us what we sometimes don’t want to hear and they question our decisions, but if you put your ego aside you will be in a stronger position to accelerate the success of your business.

[contact] Esperanza Guerrero-Anderson is president and CEO of Milestone Growth Fund in Minneapolis, a community-based venture capital fund providing financing to minority-owned companies: 612.338.0090; esperanza@milestonegrowth.comwww.milestonegrowth.com