Get in the KNOW
on LA Startups & Tech
X
Image by mariakray/ Shutterstock
How To Structure Your Board: From Pre-Seed to IPO
Spencer Rascoff
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
Properly structuring your board of directors can be one of the most important factors in the overall success of a company. As we learned in my last article about why a startup needs a board, the best way to avoid early mistakes at a startup is to surround yourself with experienced people who can provide mentorship and advice.
So, what should you focus on when building a board? You’ll want to start with a solid base and grow from there. As your company shifts, pivots and gains new funding, your board should too. Take a look at how your board may shift throughout the stages of capital-raising:
Pre-Seed Stage
At the very early stages of a company, there usually isn’t even a board of directions. Once you raise any capital, even if it’s from the family and friends round, it makes sense from a governing and legal standpoint to create a board. At this point as founder, you or you and your co-founder are the board. By the time you’ve raised early capital, you should have an idea of three to five other members you may want on the board for support and advice so you can incorporate the company. Remember that whoever the lead investor is in your next stage will want a seat at the table, so be sure that seat is saved.
Series A Stage
By the Series A, you should have around three directors on your board. This again includes the co-founders and now the Series A investor. The lead investor is normally someone who is serving on several boards at the same time, so they aren’t readily available for the everyday workings of the company. They’ll primarily bring financial advice to your business as you begin to see revenue growth.
At this stage, some companies will consider adding an independent director to the board. While this isn’t completely necessary, it can be very helpful for your company’s early development.
Series B Stage
Now at the Series B stage, you should start to see growth in the company. After adding on an investor from the Series B, your board should consist of the two founders and the two venture capitalists, and perhaps your independent director
This is an important time to add an independent director to your board if you haven’t already. This fifth member should be someone who can serve as a peer operator such as another CEO or executive in a related industry, and not just another investor. For example, maybe the company needs to hire a sales team but doesn’t know where to start. It would make sense to add a CRO (chief revenue officer) who has experience in ad sales or digital media here. You’ll want someone who can bring the experience of building out a sales team in a related category or industry.
It’s also crucial to be considering the diversity of your board. Just like any team, diversity across backgrounds, experiences, skills, genders and race/ethnicity will help benefit the company’s success. Having a diverse board means you will be able to understand and target a wider audience. So far, it’s mostly been your experiences informing the company so having a different point of view could add something fresh that you would never have considered.
Series C Stage
At this point, your company has gotten a lot larger and you may be thinking about IPO readiness. You need to think carefully about what roles you’re adding to your board and who you have to fill them. Use these additions as solutions to the functional areas of your company. If you need someone who can provide more financial rigor and be a good partner to the CFO, consider a former accountant, investment banker or former CFO who would have that skill set. It’s all about fitting the puzzle pieces of your board members together.
You’ll also want to start to think about different board committees such as nominating, executive, audit or compensation committees. When developing these committees, you should aim to have two to four board committees with two to three people each. They should have different regulations and the independence required to fulfill their purpose.
Lastly, adding more independent directors is also a wise decision at this stage.
Going Public
If you’re about to go public, it’s time to look at those already on the board. It’s normal at this stage for changes and turnover to arise such as your Series A investor opting out of sitting on a public board. As things shift around, continue to consider the diversity of the board heavily.
I was recently brought onto the board of Varo Bank despite the fact that I have very little experience in fintech and banking. In addition to a wide range of backgrounds, Varo’s board also features a wide range of skills across marketing, audit, operations and more. So although I have little experience in banking, Varo was looking for someone to help scale the company and build the brand. As someone who has built a huge consumer brand and taken companies public before, I fit the bill.
The same goes for Zulily when I joined their board in 2013. At the time, most of the board consisted of people with retail experience and early venture capital investors. They didn’t have the operational experiences of CEOs who had already scaled companies and taken them public so I was brought on.
Building a board is not a one-size-fits-all process. As a board’s needs change or priorities shift, new board members can be recruited to fulfill the new needs or goals. No matter what stage of development your company is at, it’s vital that you have the experience, skills and diversity on your board to ensure that your company will continue to develop and grow.
From Your Site Articles
- How To Startup - dot.LA ›
- Why a Startup Needs a Board: The Why and How of Constructing a Board Early ›
- Three Tips for Working With Your Start-Up Board - dot.LA ›
- Three Tips for Working With Your Start-Up Board - dot.LA ›
- Three Tips for Working With Your Start-Up Board - dot.LA ›
Related Articles Around the Web
Spencer Rascoff
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
https://twitter.com/spencerrascoff
https://www.linkedin.com/in/spencerrascoff/
admin@dot.la
LA Tech Week: Six LA-Based Greentech Startups to Know
11:47 AM | June 09, 2023
Samson Amore
At Lowercarbon Capital’s LA Tech Week event Thursday, the synergy between the region’s aerospace industry and greentech startups was clear.
The event sponsored by Lowercarbon, Climate Draft (and the defunct Silicon Valley Bank’s Climate Technology & Sustainability team) brought together a handful of local startups in Hawthorne not far from LAX, and many of the companies shared DNA with arguably the region’s most famous tech resident: SpaceX.
Here’s a look at the greentech startups that pitched during the Tech Week event, and how they think what they’re building could help solve the climate crisis.
Arbor: Based in El Segundo, this year-old startup is working to convert organic waste into energy and fresh water. At the same time, it also uses biomass carbon removal and storage to remove carbon from the atmosphere and sequester it in an attempt to avoid further damaging the earth’s ozone layer. At the Tech Week event Thursday, Arbor CEO Brad Hartwig told a stunned crowd that Arbor aims to remove about five billion tons of organic waste from landfills and turn that into about 6 PWh, or a quarter of the global electricity need, each year. Hartwig is an alumni of SpaceX; he was a manufacturing engineer on the Crew Dragon engines from 2016-2018 and later a flight test engineer at Kitty Hawk.
Antora: Sunnyvale-based Antora Energy was founded in 2017, making it one of the oldest companies on the pitching block during the event. Backed by investors including the National Science Foundation and Los Angeles-based Overture VC, Antora has raised roughly $57 million to date, most recently a $50 million round last February. Chief operating officer Justin Briggs said Antora’s goal is to modernize and popularize thermal energy storage using ultra-hot carbon. Massive heated carbon blocks can give off thermal energy, which Antora’s proprietary batteries then absorb and store as energy. It’s an ambitious goal, but one the world needs at scale to green its energy footprint. According to Briggs, “the biggest challenge is how can we turn back variable intermittent renewable electricity into something that's reliable and on demand, so we can use it to provide energy to everything we need.”
Arc: Hosting the panel was Arc, an electric boating company that’s gained surprising momentum, moving from design to delivering its first e-boats in just two years of existence. Founded in 2021, the company’s already 70 employees strong and has already sold some of its first e-boats to customers willing to pay the luxury price tag, CTO Ryan Cook said Thursday. Cook said that to meet the power needs of a battery-powered speedboat, the Arc team designed the vehicle around the battery pack with the goal of it being competitive with gas boats when compared to range and cost of gas. But on the pricing side, it’s not cheap. Arc’s flagship vessel, the Arc One is expected to cost roughly $300,000. During the panel, Cook compared the boat to being “like an early Tesla Roadster.” To date Arc Boats has raised just over $35 million, according to PitchBook, from investors including Kevin Durant, Will Smith and Sean “Diddy” Combs.
Clarity Technology: Carbon removal startup Clarity is based in LA and was founded by Yale graduate and CEO Glen Meyerowitz last year. Clarity is working to make “gigaton solutions for gigaton problems.” Their aim? To remove up to 2,000 billion pounds of carbon from the atmosphere through direct air capture, a process which uses massive fans to move chemicals that capture CO2. But the challenge, Meyerowitz noted in his speech, is doing this at scale in a way that makes an actual dent in the planet’s emissions while also efficiently using the electricity needed to do so. Meyerowitz spent nearly five years working as an engineer for SpaceX in Texas, and added he’s looking to transfer those learnings into Clarity.
Parallel Systems: Based in Downtown LA’s Arts District, this startup is building zero-emission rail vehicles that are capable of long-haul journeys otherwise done by a trucking company. The estimated $700 billion trucking industry, Parallel Systems CEO Matt Soule said, is ripe for an overhaul and could benefit from moving some of its goods off-road to electric railcars. According to Soule, Parallel’s electric battery-powered rail vehicles use 25% of the energy a semi truck uses, and at a competitive cost. Funded in part by a February 2022 grant from the U.S. Department of Energy, Parallel Systems has raised about $57 million to date. Its most recent venture funding round was a $49 million Series A led by Santa Monica-based VC Anthos Capital. Local VCs including Riot Ventures and Santa Monica-based Embark Ventures are also backers of Parallel.
Terra Talent: Unlike the rest of the startups pitching at the Tech Week event, Terra Talent was focused on building teams rather than technology. Founder Dolly Singh worked at SpaceX, Oculus and Citadel as a headhunter, and now runs Terra, a talent and advisory firm that helps companies recruit top talent in the greentech space. But, she said, she’s concerned that all the work these startups are doing won’t matter unless we very quickly turn around the current trendlines. “Earth will shake us off like and she will do just fine in 10,000 years,” she said. “It’s our way of living, everything we love is actually here on earth… there’s nothing I love on Mars,” adding that she’s hopeful the startups that pitched during the event will be instrumental in making sure the planet stays habitable for a little while longer.
Read moreShow less
Samson Amore
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
https://twitter.com/samsonamore
samsonamore@dot.la
These E-Scooter Companies Are Changing Their Low-Income Programs in LA
07:00 AM | May 26, 2022
Photo by Maylin Tu
When Lime launched in Los Angeles in 2018, the company offered five free rides per day to low-income riders, so long as they were under 30 minutes each.
But in early May, that changed. Rides under 30 minutes now cost low-income Angelenos a flat rate of $1.25. As for the five free rides per day, that program ended December 2021 and was replaced by a rate of $0.50 fee to unlock e-scooters, plus $0.07 per minute (and tax).
Lime isn’t alone. Lyft and Spin have changed the terms of their city-mandated low-income programs. Community advocates say they were left largely unaware.
A Lime spokesperson said that with its updated rate, low-income riders will still get an average discount of almost 90% off its service. He added that the startup's rates in Los Angeles are on average 50% less expensive than in most cities
“We would also like to note that L.A. riders have already saved an estimated $1 million via our Lime Access program, and we expect that figure to keep growing steadily with the new pricing in place,” said the spokesperson, who added that 2,800 low-income Angelenos have taken around 250,000 trips since the program rolled out.
Spin once provided low-income Angelenos with unlimited, free 30-minute rides. Now the company is capping the free rides to five per day. Spin did not immediately return a request for comment.
Similarly, Lyft riders were once able to get a monthly pass for $5 and pay $0.05 per minute per ride. Instead, they’ll now need to pay $0.50 to unlock the e-scooter and an additional $0.15 per minute. (There is no longer a $5 monthly charge).
The costs could add up for a demographic that is more likely than the average rider, according to data from rival micromobility startup Wheels, to use e-scooters to get to and from work.
“Lyft is now offering our Community Pass without a monthly payment to make it even easier for more riders to save,” James Boshers, Lyft associate general manager for Southern California, said in an email. Several hundred riders use the program in L.A., according to a spokesperson.
The changes were rolled out with little fanfare, but that might be a moot point. Few of the local transportation advocates dot.LA reached out to were even aware the equity programs existed.
“I mean, I'm not surprised. I think people love giving discounts as a way of showing equity, but there's got to be more,” said Oscar Zarate, assistant director of organizing for SAJE.
A spokesperson for Lime said they have tried unsuccessfully to reach representatives at the organization.
The city of Los Angeles doesn’t promote micromobility equity programs to potential riders; that responsibility falls wholly on companies.
“Revenue generated through the micro-mobility program is dedicated solely to enforcing the conditions of the permit,” LADOT spokesperson Colin Sweeney said by email, “which includes ensuring companies partner with community-based organizations and market their services to low-income residents among other critical safety and consumer protection functions.”
But earlier this year, Sweeney acknowledged that getting micromobility companies to even put their vehicles in low-income communities has been difficult. At first, the city offered incentives to operators, but that proved ineffective.
“As a result, our permanent micromobility program which was established last year REQUIRES operators to deploy a certain percentage of vehicles to specific neighborhoods as a condition of their permit,” he said
A Lime e-scooter parked in West Adams.Photo by Maylin Tu
Little Outreach, But More Scooters
Despite those requirements, some community advocates say that companies are not doing enough to reach out to communities to remove barriers to access.
Yolanda Davis-Overstreet serves as vice president of the West Adams Neighborhood Council and chairs its public safety committee. To her knowledge, no micromobility company operating in West Adams has reached out to the group.
She does, however, plan to reach out to them.
West Adams, a predominantly Black and Latino neighborhood, has experienced high rates of traffic violence. One stretch of Adams Blvd between Fairfax Ave and Crenshaw Blvd saw 59 severe and fatal collisions between 2009 and 2019, according to the L.A. Department of Transportation. Last year, the department completed a number of safety and infrastructure improvements along Adams, adding two miles of new bike lanes that make it safer for e-scooters, bikes and pedestrians.
Davis-Overstreet said she’s starting to see more shared e-scooters in her neighborhood.
“It's a privilege that these scooter companies seem to have, like ‘I don't care about your space. I'm here now’,” she said. ”No, if you're going to be here, you need to be here in a respectful way.”
Yolanda Davis-Overstreet chairs the West Adams Neighborhood Council's public safety committee.
Image courtesy of Yolanda Davis-Overstreet
It’s not that she’s opposed to e-scooters, Davis-Overstreet said, but as e-scooter companies ramp up in the community, so do concerns about safety and accessibility.
She said she wants companies to figure out how to respectfully integrate into a community that is already pursuing alternative forms of transportation.
“That's another reason scooters should be connected with [our] community … How are we going to get people in the United States — in particular in L.A. — in the conversation of climate change, if we don't give them access to other tools to use other than cars?”
Alternative forms of transportation like e-scooters have the potential to make a big impact on underserved residents, especially as gas prices surge.
Eli Akira Kaufman, executive director of the Los Angeles County Bike Coalition, a Lime partner, said that Lime has been a valuable collaborator in L.A. on initiatives like First Ride Academy and Lime Hero. But he would like to see companies do more for underserved communities, like advocating for better biking infrastructure and sponsoring workforce development programs.
“Lime Access and these different accessibility programs are great. We totally applaud their intent. But what more can be done to serve our most vulnerable commuters?”
Others cited the requirement that low-income customers fill out an online form and provide proof of income to access discounted rides.
“I don't know if a señora is going to be able to do that,” said SAJE’s Zarate. “And I think people really underestimate how difficult it is to fill out these applications, provide all this documentation— and there's a stigma, ‘Oh, you're applying for these low-income things’ that also discourages people from applying.”
Zarate added that Los Angeles transportation advocates want to start a dialogue—not a fight—with e-scooter companies like Lime, Bird and Lyft.
“Working class communities have always been multidimensional in terms of their transit and how they get around. People bike all around, you feel me?,” he said. “So, I think there's a strong tradition in the community. It's just about finding ways that work for everyone.”
‘Do Your Homework’
Currently, there are six dockless e-scooter and e-bike operators in Los Angeles: Bird, Lime, Spin, Superpedestrian (LINK), Wheels and Lyft. Each runs a separate low-income program with rates varying widely. The same 30-minute ride might cost $0 (Spin, LINK) to $7.85 (Bird) plus tax, depending on the company.
The L.A. Department of Transportation requires micromobility operators to:
- Deploy 20% of their total fleet in equity zones if they operate in certain more lucrative parts of the city like Venice, Hollywood and Downtown L.A.
- Offer a cash option for unbanked customers without a credit or debit card.
- Offer a non-smartphone option to unlock vehicles.
- Offer discounted rates for customers with an income level at or below 200% of the federal poverty guidelines.
- Attend meetings with community stakeholders such as neighborhood councils and disability rights organizations.
- Partner with a community-based organization.
Here’s a run down of costs and information for each low-income program operating in the city of Los Angeles.
Wheels: Wheels for All
$1.10 flat rate for 30 minutes
Lime: Lime Access
$1.25 flat rate for 30 minutes
Bird: Community pricing
50% off plus tax
Superpedestrian/ LINK: LINK-Up
Unlimited free 30 minute rides
Spin: Spin Access
Five free 30 minute rides per day
Lyft: Lyft Community Pass
$0.50 to unlock and $0.15 per minute
Are you enrolled in Lime Access, Lyft Community Pass or Spin Access and have the recent changes affected you? Let us know!
This article has been updated to include information from Lime about their efforts to engage with L.A. community groups.
From Your Site Articles
- Los Angeles Micromobility News - dot.LA ›
- Escooter Startup Superpedestrian Takes to LA Streets - dot.LA ›
- Can Bird Fix the Hazards of E-Scootering? - dot.LA ›
- Can WeHo-Based Wheels Get More Underserved Angelenos to ... ›
- Wheels Agrees To Sell Business to Micromobility Firm Helbiz - dot.LA ›
- Wheels Agrees To Sell Business to Micromobility Firm Helbiz - dot.LA ›
- Wheels Agrees To Sell Business to Micromobility Firm Helbiz - dot.LA ›
- Meet the Independent Chargers Who Hunt E-Scooters in LA - dot.LA ›
- LA’s E-Scooter Winners Now Clear as Cities Ratchet Up Regulations - dot.LA ›
- E-Scooters Could Be The Future Of Micromobility In LA - dot.LA ›
Related Articles Around the Web
Read moreShow less
Maylin Tu
Maylin Tu is a freelance writer who lives in L.A. She writes about scooters, bikes and micro-mobility. Find her hovering by the cheese at your next local tech mixer.
RELATEDTRENDING
LA TECH JOBS