Most first-time founders have never sat on a board. The word itself conjures images of mahogany tables and grey-haired executives in suits. But for an early stage company, a board is something much simpler and much more useful than that.
At Lomond, we take a board seat with every investment we make. Not because we want control, but because proper governance makes companies stronger. Here’s what founders need to know.
What a board actually is
A board of directors is the group of people who are legally responsible for the company’s direction. In an early stage business, this is usually the founder (or founders), plus one or two investor directors, and sometimes an independent director who brings specific expertise.
The board isn’t there to tell you how to run your business day to day. That’s your job. The board is there to hold you accountable, help you think through strategic decisions, and make sure the company is heading in the right direction. Think of it as a group that governs. You manage.
Why governance matters at the early stage
Some founders see governance as something for big companies. A tax on their time that slows them down. I understand the instinct, but it’s wrong.
Good governance at the early stage does three things. First, it forces discipline. When you know you’re going to present your numbers and your plan to a board every month, you keep on top of things. Decisions get made rather than deferred. Problems get surfaced early.
Second, it protects the founder. If things go wrong and you’ve been running the company with proper governance, you can demonstrate that you acted responsibly. If you haven’t, you’re exposed personally as a director.
Third, it builds the muscle. If your company grows and takes on more investors, bigger partners, or eventually goes for an exit, you’ll need solid governance in place. The companies that build these habits early are the ones that scale without falling over.
Board composition
For a company that has just taken angel investment, the board is typically small. The founder as CEO and executive director. The lead investor as a non-executive director. Maybe a second non-executive if you have a co-investor or an independent advisor.
SeedLegals data shows that about 32% of smaller funding rounds include a board seat for the investor. At Lomond, it’s 100%. We see it as non-negotiable, and most founders come to value it quickly once they experience the benefit of having experienced people around the table.
What happens in a board meeting
A good early stage board meeting covers five things. Financials: where are you against budget, what’s your cash position, what’s the runway. KPIs: what metrics matter and how are they trending. Strategy: are we on track with the plan, and does the plan still make sense. Risks: what could go wrong, and what are we doing about it. Decisions: anything that needs board approval, like major hires, significant expenditure, or changes to the business model.
The whole thing should take one to two hours. If it’s running longer than that, you’re either covering too much or not preparing properly. A decent board pack sent out a few days in advance means everyone arrives informed and ready to make decisions.
How often to meet
In the first year after investment, monthly. Things move fast in early stage companies and a lot can change in 30 days. Monthly meetings keep everyone aligned and give the founder regular access to experienced input.
As the company matures and the rhythm becomes established, you can move to quarterly. But monthly in year one is the standard, and I’d push back on any founder who wanted to do less.
The board pack
Keep it simple. One or two pages covering: profit and loss summary, cash position and forecast, key metrics and how they’re trending, a short narrative on what happened last month, and a list of decisions or approvals needed. That’s it. If you’re spending days putting together a board pack, you’re overcomplicating it.
Governance vs management
This is the distinction that trips people up. The board governs. The founder manages. The board sets direction, approves strategy, and oversees performance. The founder executes, makes operational decisions, and runs the team.
A good investor director stays on the right side of this line. They challenge, question, and advise. They don’t reach over the table and start managing your team. If your investor is doing that, something has gone wrong in the relationship, not in the governance structure.
At Lomond, we’re clear about this from day one. We’re there to help, not to take over. And we’ve found that founders who embrace governance early end up running better, stronger businesses because of it.
If you want to know more about how we work with our portfolio companies, visit the founders page. Or if you’re ready for that first conversation, get in touch.