Thoughts on Board of Directors, Advisors and Consultants for start-ups. What should be the composition? What should be the engagement model? How to get the most out of them? What is expected in return? *** Note: this is not, in any way, a legal document or a document that reflects on laws in the US or in other countries ***

1. or
„this ain‘t just you and your buddies anymore“
Board and Advisors: how to get real value

2. Agenda
Board of Directors
Advisors & Advisory Board
A few last words
Introduction & StrategyIntroduction

3. Me
3
Career
Proprietary and confidential
NOT EXHAUSTIVE
Investor – venture and angel
IPO Sold IP
Sold Merged

4. Strive Capital provides a unique solution to app makers to scale
their businesses
4
• “Check“ size of $500k-1 mn fills gap between angels and VCs
• Institutional money easier to handle than a group of angels
• Lead and follow-on financing available through fund
• Compatible to syndication and subsequent funding from other
VCs
• Strategic LP partners are a default exit option, limiting downside
volatility
Capital
• User management technology
• Storage & sync technology
• Monetisation technology, including mobile ad network
• Global cloud infrastructure and operations 24/7
• Other resources from strategic LPs
Technology
• Channel relationships with OEMs, chipset vendors and carriers
• Deep market access to JP, CN, IN, EU
• Business models for advertising and subscription
• Mobile industry insiders
Distribution
Proprietary and confidential
Capital
Technology
Distribution
Growth

5. Strive Capital is a „quant“ micro-VC that derives most of its deal
flow from a proprietary analytics-engine
5
Larger # of
deals, any
investment size
Smaller # of
deals, smaller
investment size
Angel VC
Traditional
Traditional
Strive Capital
Super angel
Micro-VCs
create some of
highest returns in
industry
Proprietary and confidential

6. Before we move on… “why should I listen to this guy on *this* topic?”
6
*Strive Capital also counts wiih the support of two Entrepreneurs-in-Residence in San Francisco and Tokyo
Proprietary and confidential
• Member of the Board of Directors of 10 companies – all in Tech
• Investor, Independent and Executive Board member experience
• Currently in 4 - 2 in SF and 2 in Portugal
• Advisor or consultant to 20+ Board of Directors of companies ranging from a
few Million to tens of Billion in market cap
Board experience
• Advisory Board member to 5 companies – all in Tech
• Currently in 1 – I don‘t like being an advisor anymore...ask me why at the end
Advisor & Advisory Board experience

7. Agenda
Market Opportunity
Advisors & Advisory Board
A few last words
Introduction
Board of Directors

8. Let’s start at the beginning
8Proprietary and confidential
“A board of directors is a body of elected or appointed members who jointly oversee the
activities of a company or organization. (…)
A board's activities are determined by the powers, duties, and responsibilities delegated to
it or conferred on it by an authority outside itself. These matters are typically detailed in
the organization's bylaws. (…)
Typical duties of boards of directors include:
• governing the organization by establishing broad policies and objectives;
• selecting, appointing, supporting and reviewing the performance of the chief executive;
• ensuring the availability of adequate financial resources;
• approving annual budgets;
• accounting to the stakeholders for the organization's performance;
• setting the salaries and compensation of company management”
What does the Board *not* do?

9. A taxonomy for the people attending your Board meeting
9Proprietary and confidential
• Key executives, e.g. CEO, COO, CPO
• Non-executive:
• Investors – representing their own personal investment, fund that has invested (VC, PE,
super angel fund, etc), or representing company/strategic investor
• Independent board members – normally „neutral“ parties that do not represent investors
nor are executives
• Other nomenclature: Inside (executives, investors) and Outside Directors (independent)
• Q: Why do I sometimes see co-founders who are no longer executives still on the Board?
Board members
• Company secretary / lawyer – for minutes and legal matters
• Board observer – normally representing smaller investor; does not have vote as Board
member, but... may still be an investor. Sometimes associate for fund with Board seat
• Other company executives – presentation and participation on specific topics
• „Outsiders“ – subject matter experts (e.g. advisors), other investor representatives, etc
Non Board members

10. Board structure… in general
10Proprietary and confidential
„Birth“, through friends & family round...
maybe angel round(s)
• No Board, or...
• Just co-founders/majority owners
After first „institutional“ money
• Most Boards are of 3-4 people
• 1-2 Executives
• 1 Lead Investor
• 0-1 Independents
Time
Size
Start-up through B, C... rounds
• Most Boards are of 5-6 people
• 1-2 Executives
• 2-3 Lead Investors
• 0-1 Independents
“How about after ‘true’ growth rounds?”

11. Thoughts on Board composition
11Proprietary and confidential
Only have executives that can really
contribute at Board level:
• Not all co-founders need to be
Board members – consider
ownership *and* contribution
„will this person contribute on the
governance of the company?“,
„does he/she really need to be on
the Board?“
• Control matters, but your investors
likely have special rights... anyway
• Not static... execs change,
ownership changes
Board of Directors
Only significant investors,
which normally means:
• Largest from last round
• 1-2 from rounds
immediately before
• ...investors do need to /
should leave the board (or
stay as observers only)
after they are no longer
significant or as new
investors may „ask“ for it/
need extra board seats
• Get the partner you want...
If you can
Independent members may
be needed because..:
• They have expertise that is
needed at Board level that
no other board member
could provide
• New investor wants to
avoid that previous
investors or the company
executives have majority
control in numbers...
independent can act as
„buffer“

12. Tips for successful Board meeting/call
12Proprietary and confidential
• Don‘t just show up for it... prepare „it“
• Key action items from last Board meeting/call
• Items that *need* Board approval, normally governance related (note: in Portugal, some of
these items still need to go to Stockholders Meeting)
• Items that *should* have Board approval, e.g. strategic direction of the company, potential
significant resource allocations/reallocations, etc
• Risks that have emerged internally or externally – „cover my a$$“
• Achievements for the business since last time – get credit
• Don‘t spend much time on beautiful presentations (or maybe only every 6 months or so),
but on content – except for financials, most can be in a memo
• Prepare your Board members
• Firstly, prepare your Chairman, if is not you. He/She will (likely) lead the meeting/call
• Share materials *before* the Board call/meeting
• Prepare other members individually *before* Board call or when major decisions need to be
made (if monthly, not needed before *every* single one)
• IMHO, only board members should attend the entire meeting... All the rest, „come in“ when
and only if absolutely needed and then „out“. Observers normally entire time, but do not vote
• Observers should represent smaller strategic shareholders, not „associates“ of fund

13. Typical Board Agenda
13Proprietary and confidential
• Approval of minutes from last meeting
• Items that *need* Board approval or oversight
• Financials and capital needs
• Other governance items – option grants for approval, major deals & partnerships, etc
• Strategic discussion
• Summary update since last meeting – tops and flops, or other construct
• Customer/User-side metrics, e.g. customer/sales pipeline in enterprise companies, user
traction/retention/engagement in consumer companies
• People/team – hires, fires, changes
• Product evolution, plans/roadmap
• High-level strategic discussion – vision, strategic objectives (every once in a while, but
certainly not every call/meeting)
• Any items that have significant risk or have come up – IP issues, trademark, etc
• AOB (any other business) – normally to let others raise points that they want to make ...
Normally, minor points, otherwise should be a topic on its own right
• Book next Board meeting/call – some companies do this upfront on an annual or semi-annual
basis; others do it at end of each Board meeting/call
NOT EXHAUSTIVE

14. Tips on how to manage your Board
14Proprietary and confidential
• Respect and nurture your board members
• Not your buddies and will sometimes not agree with you and show that in their decisions.
This is not always bad, because... you are not always right!!!
• Always listen to them and then... decide whether to pursue their recommendation or not
• Socialize beyond the Board room and get to know them, their aspirations and current
focus; with investors, understand what is going on with their Firm
• *Do* get value out of them
• Prepare them the best you can for the meetings / calls you need to have – make sure you
share context
• Engage them on their areas of expertise outside of the Boardroom, like you would do with
advisors or, even in some cases, with consultants
• Access their network of connections in a wise-way – specific on who/what company to
engage; make sure the intro needs to be „now“
• One size does *not* fit all: customize your approach to each board member. Every single
one of them will likely be very different in what they want and what they can give back
• Use independent members or more „neutral“ investor members as buffer when issue arises
with other board member, investor/investors, etc

15. Agenda
Board of Directors
Past Performance & Portfolio
A few last words
Introduction
Advisors & Advisory Board

16. What advisors are *not*
16Proprietary and confidential
• Consultants
• Consultants would normally fulfill a role the company cannot or does not want
to hire for at this stage – specialized area of engineering or ops, PR, HR, etc
• Duration of engagement is normally in weeks or a few months
• Engagement intensity is significant – 1-day a week, all the way to full-time
• That said many confuse advisor with consultant… an advisor does not fulfill a
role, he helps with a need
• Board members
• Board members are responsible for overseeing the whole company
• While they may have expertise and specialties, they also have responsibilities
(e.g. legal) and “a say” (now ask me why I don’t like to be an advisor)
• Normally has a 2-3 year mandate, which is likely longer than an advisor

17. What advisors *are*
17Proprietary and confidential
• Specialists, or even experts, in a specific functional area (e.g. data science/
analytics) or more broadly across several areas (e.g. business development,
product) within the industry the company is in, in which it needs help on
• Support for employees/functions company already has – or is in process of having/
hiring – that work/will work on the subject the advisor will help on (could be CEO)
• Medium-term helpers, normally with mandates of 1-2 years, but with light intensity
of engagement, e.g. normally once a month or thereabouts on average
• Very experienced in an area of knowledge, an industry, or running a company… not
just bright / intelligent people
• People you would likely hire, were it not for their own current career preferences or
your own limited resources (normally money)

18. Tips on how to best engage an advisor
18Proprietary and confidential
• Be very specific in your discussions with a potential advisor on what you expect
from him/her, e.g. if you want him/her to “open doors”, ask explicitly if he/she
would be willing to do it, to what extent and how
• Define some high-level objectives together with him/her; these will *not* be KPIs
with ranges attached to them or end up in an SLA
• Also understand well why he/she is interested in you and what is expected from
you / your company – not just money, big upside in case of successful exit, etc –
but what other type of upside (e.g. knowledge, networking with others on your
advisory board or board) do they expect to get from the relationship
It is more common to underutilize an advisor / advisory board
member than to overutilize him/her

19. “When do I need or should have an advisory board?”
19Proprietary and confidential

20. Agenda
Board of Directors
Advisors & Advisory Board
Competitive Advantages
Introduction
A few last words

21. Typical terms up for discussion
21Proprietary and confidential
• Object of contract
• Expected role, support, etc
• Length of engagement
• Renewal conditions
• Remuneration
• Amount
• Payment terms – monthly, quarterly?
• Currency of payment – EUR, USD, other
• To whom – person himself/herself or a company (services agreement)
• Options (or, at times, Stock grants)
• Percentage of company
• Out of what? Fully diluted cap table, pre-dilution?
• Strike price … and no, it’s not as simple as doing last VC round price per share
• Vesting period
• Accelerated vesting? Triggers?
• Other conditions – tag along, drag along, etc
• Expenses
• Others – IP assignation, invention rights, etc
NOT EXHAUSTIVE

22. Before we go…
22Proprietary and confidential
• There are no “free lunches”
• While Executive Board members or investor board members normally do not get
anything to be on your board…
• Independent Board members (almost) always get options (or even stock, more rarely) in
your company and can get a remuneration as well (practices vary)
• Equally Advisors and Advisory Board members will get options (or even stock; normally
less than an independent board member). They may get remuneration, although in
some cases their involvement may be “cash-free”
• You get what you put in… or rather “garbage in-garbage out”
• If you do not prepare well your board members and your advisors, their view on
company will be limited and it may influence their immediate and future decisions, e.g.
investor board member decides not to follow-on in next round
• If you do not ask for specific things, you will not get specific things; if you are not open
and frank, they will not be open and frank; and so on and so forth
• While you would like to get as much as you can for no cash, sometimes you need to
put “skin in the game” to get real commitment from these people you want to work
with – your judgment call and then part of negotiation

23. And finally…
23Proprietary and confidential
But most of all, figure out YOUR OWN RULES
Understand best-practices
Surround yourself with talented advisors and board
members… that you can work with
Don’t be stingy…
… but also don’t give too much away, too soon

24. Board and advisors: how to get real value or
„this ain‘t just you and your buddies anymore“