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For ventures to flourish, they need to be embedded into a venture ecosystem that provides the key ingredients for success, and allows for an efficient and effective allocation of those resources and capabilities. If we view venturing as a series of interactions between the key players at various stage of a venture, as suggested by Dinnar and Susskind (2019), we can distinguish three key players with distinctive roles, functions and motivations:

– Entrepreneurs: The founders turn opportunities into business value. Entrepreneurialism provides the capabilities to realize ideas and capitalize from value creation by selling or living from the companies they create.

– Investors: Investors provide the much-needed capital to scale the business. They expect a risk-adjusted return from their investments. They also serve as validators, as they choose between different options in which to invest.

– [13] Venture Boards: One of the key functions of the venture board is to align the interests of entrepreneurs and investors, with the company’s success as the primary objective. They provide co-direction and control and expect to be remunerated for their services.

Exhibit 1: Venture ecosystem (Hilb 2019, ventureecosystem.com)

Historically, most of the focus has been on entrepreneurs and, to a lesser extent, investors. Venture boards have only gained attention more recently. The two catalysts have been well-known cases of failure in venture governance (Garg and Furr 2017) and a greater level of research at the intersection of corporate governance and entrepreneurship. The roots of this research can be traced back to Mace (1948), a Harvard professor, who stressed that the venture board can be a valuable resource of advice beyond acting as a supervisor (Gabrielsson 2017).

The pivotal role of venture boards, however, is becoming better understood, as summarized by Garg and Furr (2017, 327): “Although the exact role of the board may vary across ventures and institutional contexts, venture boards are typically central to the most significant actions within ventures.”

The venture board plays a pivotal role by connecting investors with entrepreneurs – and holding together the venture ecosystem.