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The first time I saw the inside of a boardroom, I was the most junior executive at MovieFone, a public company I worked at from 1995–1999 as the “internet guy.” MovieFone was an interactive telephone/media company at the dawn of the commercial internet. The board consisted of the founders, the chairman/majority shareholder (the CEO's father and a formidable character I'd met a few times), one of the chair's business associates, and one independent director (the even more formidable Strauss Zelnick).

I gave my “state of the department” presentation to that board. I found presenting to that board of directors similar to how a lawyer must experience arguing a case before the Supreme Court. You talk for two minutes, someone interrupts you with a question, and then you stand in the firing line until someone mercifully tells you that it's over. You slink out of the room, rethinking every word that just came out of your mouth, wishing you could have a do-over.

While I worked there, I presented to the MovieFone board several times. Each session was uncomfortable, but I got a lot out of each one. I constantly confronted one question, “Why is your group losing so much money?” I responded each time with an unsatisfying combination of mumbled apologies, while pointing out that other internet businesses were losing much more money.

Even though that wasn't a winning answer with the MovieFone board, it was a formative experience in my career. By the time I started my first company, Return Path, I felt like at least I had a running start on how to form, lead, and report to my board of directors.

I was CEO of Return Path and chaired its board for two decades. We scaled the business through multiple pivots, acquisitions, financings, divestitures, growth spurts, layoffs, two recessions, 9/11, and the dot-com bust. When Validity acquired Return Path in 2019, we were a vibrant, $100 million revenue, profitable industry leader.

Our board started with two independent directors and me. It grew to a highly functioning board, including three great venture capitalists (Fred Wilson, Greg Sands, and Brad Feld, coauthor of this book) and two outstanding independent directors (Scott Petry and Jeff Epstein). Over two decades, we have had over 15 directors serve on the board. I learned how to build and run an effective board of directors from each of them.

While I've made many mistakes, I've gotten a lot of things correct and have learned a lot. I realized the immense power of a strong board many times, but the most memorable was a board meeting when we were wrestling with several tough decisions since the business was going sideways. These decisions included whether to sell off two business units to focus on our most promising line of business, even though that meant shrinking the company by over 50%. We were also considering whether to expand internationally, and whether we should build an indirect sales channel. In a long and boisterous board meeting stretching from the boardroom to a dinner that included my senior management team, we charted a bold new course for the business that set us on a path we ended up following to a successful exit a dozen years later. A less functional board could have taken a more conservative approach. The business likely wouldn't have thrived and might not even have survived.

Today, my new company, Bolster, helps startups, scaleups, and public companies find and recruit talented executive leaders, mentors, and coaches. We help CEOs build their boards and have helped dozens of CEOs think strategically about bringing in independent directors. We help CEOs determine the kind of executives they want to add to their boards. And, we help them find, hire, and compensate those directors.

I've taken a different approach to building Bolster's board. The Return Path board consisted of seven White males with prior board experience, similar to most companies throughout history. In contrast, the Bolster board has two White men, one Black man, and three women, one of whom is Asian-American, one of whom is Black, and one of whom is Latina. Four of them are first-time directors. Three of our investors, who are White men, chose to be board observers rather than take a board seat so we could fill board seats with diverse directors. It's early in Bolster's life, but I already feel that our board is more powerful and effective than the one we had at Return Path, especially at this stage. This approach is a new way to scale up a board: leveraging excellence through the observer roles while expanding the boardroom's diversity of experience and demographics.

I've served on a dozen boards and chaired about half of them, including private companies, a public company, a non-profit board, university alumni boards, and a complex industry trade association board with over 40 members. I've spent a lot of time with venture capitalists and entrepreneurs understanding their views on boards. I've also observed my wife Mariquita's experience serving on and chairing several non-profit, civic, and community organization boards.

After completing the second edition of Startup CEO: A Field Guide to Scaling Up Your Business and the first edition of Startup CXO: A Field Guide to Scaling Up Your Company's Critical Functions and Teams, I realized that I often wrote and blogged about boards publicly for Bolster and on my blog at startupceo.com. I approached Brad, whom I've worked with in different capacities for 20 years (including sitting on four other boards together), and Mahendra, whom I met when he and Brad wrote the first edition of Startup Boards: Getting the Most Out of Your Board of Directors, about collaborating on a second edition.

Since the first edition was written in 2013, I thought an update could include more contemporary thinking about boards. For example, Delaware created Public Benefit Corporations (PBCs) in 2013, and the dialogue about stakeholder vs. shareholder capitalism has recently gained momentum.

While the discussion around diversity in the boardroom was becoming more extensive, George Floyd's tragic murder in 2020 significantly changed the dialog and the urgency around boardroom diversity. Finally, the COVID-19 pandemic impacted all aspects of business, including the boardroom. After a brief discussion, Brad and Mahendra enthusiastically supported the idea. The second edition is the result of our collaboration.

I hope you enjoy Startup Boards: A Field Guide to Building and Leading an Effective Board of Directors. If you are a CEO looking to build and lead an effective board, an investor thinking about how to improve some of the boards you are on, or an executive thinking about how to create a “board-ready” profile for yourself, as I did at MovieFone, we hope you find this book useful.

Matt Blumberg

Bolster, founder/CEO

February 2022