Small Company Boards - SMEs, Startups 

SMEs and startup companies are numerous, small and remain hidden from the general public until they become successful. The lifecycle of a startup is typically:

• a good idea 
• funded by the person with the idea (the founder and others)  
• proto type product development
• capital raising to go to market
• a board is put in place 
• product sales (or not)

Startups can fail at any stage of this process. Once they become established they would be categorised as an SME (small to medium enterprises).

The Directorship scene - warts and all

WOB has found directors for a small number of SMEs and tried to assist a number of startups to find directors.  Many of the startup founders who seek our assistance fail to carry through with the appointment of  a director - perhaps their expansion plans go on hold, access to capital dries up or it all gets too hard.

So it takes someone who understands the lifecycle hurdles to consider the board of a small company.  They do not pay very well or they offer equity in place of an immediate monetary fee. So you need to be risk tolerant and patient. But your small startup could be the next Microsoft. And you may get quite involved with the running of the startup given cash is in short supply to hire experienced senior managers.

What WOB can offer?

We have for some time been looking for an entry path to the startup sector.  We have found one in Australian Small Scale Offerings Board (ASSOB) which is a second board ( a baby ASX) for capital raising for smaller companies. ASSOB has recently launched  a service that allows companies and aspirant and established directors to be part of an online market for directors.

WOB will be introducing enhancements to My Resume shortly which will enable WOBers to indicate an interest in startup companies and facilitate an interaction with ASSOB. 

What value proposition do you need for a startup?

Startups have similarities about the qualities they should look for in an external director.    

A generic list is:

• understanding of / experience with a startup
• some specific industry knowledge
• sufficient experience to mentor the startup team
• ability to work with the founder and the startup team 
• a network of useful business contacts (including overseas if startup is seeking international markets) 
• additional skills that will complement the team in place

Need for Due Diligence

Before anyone accepts a directorship they should do adequate due diligence on themselves and the company. This is the responsibility of the individual.  The CPA published a guide to assist which is titled 'Finding the right board for you' and is reproduced at   http://www.womenonboards.org.au/pubs/