Dave Berkus on Boards at ACA
I just returned from the Angel Capital Association Summit in San Diego. It was a great event and would highly recommend it to all Angel Investors. David Berkus who is widely known for his contributions to the Angel community as well as for his method of valuating companies – the “Berkus Method” gave a presentation on boards that was excellent.
Some quick notes from his talk:
-Every board needs an audit committee and compensation committee. Other committees could also be beneficial, but it is on a case by case basis.
-A general guideline of board compensation is 1 percent that is vested over 2-4 years.
-The boards of small companies should focus the spending where there is a demand pull. Don’t go in direction of using ‘cost push’ to determine spending. This is where the CEO says where he thinks costs should go. Instead, find where demand is pulling on company and go in that direction. Try to “expand the runway” in the direction of this “demand pull”.
You may want to check out his book “Extending the Runway” which discusses Boards (all of his proceeds go to the Boys Scouts of America). I spoke with Frank Peters after the session. He said he and Dave may do a show expanding on this presentation which will get into some war stories about being on boards.
Read the original article here.