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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.
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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
🔦 Spotlight
In the midst of widespread gaming industry layoffs, a glimmer of positive news emerges as Disney announces a significant move: a $1.5 billion investment in Epic Games. 🏰💰🐭
Disney's $1.5 billion investment in Epic Games, disclosed late Wednesday, signals a strategic alignment aimed at expanding the success of "Fortnite." The deal enhances Epic's growth prospects after financial setbacks, including layoffs, and strengthens the partnership between the two companies. With Disney gaining a larger equity stake in Epic, the collaboration will broaden the integration of beloved Disney franchises like Marvel, Star Wars, Pixar, and Avatar into the game, potentially boosting its appeal and longevity. This significant investment underscores Disney's commitment to interactive entertainment and signifies a shift towards games as a primary revenue stream, aligning with the growing trend of digital engagement among younger demographics. Moreover, the potential for crossover sales of physical Disney products within "Fortnite" and the exploration of new content distribution channels are just some of the opportunities arising from this partnership.
For LA tech, the Disney-Epic Games partnership represents a validation of the region's burgeoning tech and gaming ecosystem. The substantial investment in Epic, who maintains a large Los Angeles office with 1,000+ employees (according to LinkedIn), reflects confidence in the LA’s talent pool and innovation potential. Additionally, this partnership between two industry giants fosters an environment for further collaboration, investment, and growth within LA's tech sector. As Disney and Epic Games deepen their ties and explore new avenues for content integration and distribution, it not only elevates the prominence of LA as a tech hub but also stimulates economic growth and job creation in the region. This partnership highlights LA's unique position as a hub where technology and entertainment converge. With its ability to integrate diverse industries, LA is driving innovation and expansion in digital entertainment. 🚀💸🎮
🤝 Venture Deals
LA Companies
- ProducePay, a financing and marketplace platform for the fresh produce market, raised a $38M Series D led by Syngenta Group Ventures joined by Commonfund, Highgate Private Equity, G2 Venture Partners, Anterra Capital, Astanor Ventures, Endeavor8, Avenue Venture Opportunities, Avenue Sustainable Solutions, and Red Bear Angels. - learn more
- Blush, an invite-only dating app that drives users to local businesses on dates, raised a $7M Seed Round from individuals like Naval Ravikant. - learn more
- Mogul, a startup founded last year that provides an overview of an artist's royalty earnings and identifies areas where money is owed but has not yet been collected, raised a $1.9 million seed round from Wonder Ventures, United Talent Agency, AmplifyLA, and Creator Partners. - learn more
- Avnos, a hybrid direct air capture startup, raised a $36M Series A led by NextEra Energy and joined by Safran Corporate Ventures, Shell Ventures, Envisioning Partners, and Rusheen Capital Management. - learn more
- AI.fashion, startup whose mission is to help retailers enhance the online shopping experience by providing consumers with virtual try-ons and personalized fashion recommendations, raised a $3.6M Seed Round led by Neo. - learn more
- Suma Wealth, startup that aims to demystify financial topics and provide culturally relevant content, virtual experiences, and resources to help Latino users navigate financial challenges and opportunities, raised a $2.2M Seed Round . Radicle Impact led, and was joined by Vamos Ventures, OVO fund and the American Heart Association Impact Fund. - learn more
- 222, a startup that helps users discover their city and meet new people through unique social experiences, raised a $2.5M Seed Round. Investors included 1517 Fund, General Catalyst, Best Nights VC, Scrum Ventures, and Upfront Ventures. - learn more
- LimaCharlie, a security operations cloud platform, raised a $10.2M Series A led by Sands Capital. - learn more
- Polycam, an app that uses a smartphone’s sensors to capture 3D scans of objects, raised an $18M Series A co-led by Left Lane Capital and Adjacent, and joined by Adobe Ventures and individuals like Chad Hurley and Shaun Maguire. -learn more.
LA Venture Funds
- M13 co-led a $6.5M Seed Round for Code, a micropayments startup building upon the kin (KIN) cryptocurrency. - learn more
- Wonder Ventures has garnered $102 million in fresh capital commitments. - learn more
Actively Raising
- ReelCall, Inc., an entertainment technology company focused on powerful apps and platforms that help build and maintain the professional network of connections vital to career growth, is raising a $850K Pre-Seed Round. - learn more
- CZero, a startup building software to decarbonize logistics for logistics businesses and goods business through a vetted marketplace and optimization software. - learn more
- Couri, a technology startup addressing last-mile delivery issues, is raising a $450K Pre-Seed Round at a $2.2M post money valuation. - learn more
- Sweetie, a marketplace to help people plan date nights, is raising a $1.5M Pre Seed Round. - learn more
- StartupStarter, an investment platform that provides real-time data and analytics on startups, is raising an $850K Angel Round. - learn more
If you’re a founder raising money in Los Angeles, give us a shout, and we’d love to include you in the newsletter!
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Here's How To Get a Digital License Plate In California
03:49 PM | October 14, 2022
Photo by Clayton Cardinalli on Unsplash
Thanks to a new bill passed on October 5, California drivers now have the choice to chuck their traditional metal license plates and replace them with digital ones.
The plates are referred to as “Rplate” and were developed by Sacramento-based Reviver. A news release on Reviver’s website that accompanied the bill’s passage states that there are “two device options enabling vehicle owners to connect their vehicle with a suite of services including in-app registration renewal, visual personalization, vehicle location services and security features such as easily reporting a vehicle as stolen.”
Reviver Auto Current and Future CapabilitiesFrom Youtube
There are wired (connected to and powered by a vehicle’s electrical system) and battery-powered options, and drivers can choose to pay for their plates monthly or annually. Four-year agreements for battery-powered plates begin at $19.95 a month or $215.40 yearly. Commercial vehicles will pay $275.40 each year for wired plates. A two-year agreement for wired plates costs $24.95 per month. Drivers can choose to install their plates, but on its website, Reviver offers professional installation for $150.
A pilot digital plate program was launched in 2018, and according to the Los Angeles Times, there were 175,000 participants. The new bill ensures all 27 million California drivers can elect to get a digital plate of their own.
California is the third state after Arizona and Michigan to offer digital plates to all drivers, while Texas currently only provides the digital option for commercial vehicles. In July 2022, Deseret News reported that Colorado might also offer the option. They have several advantages over the classic metal plates as well—as the L.A. Times notes, digital plates will streamline registration renewals and reduce time spent at the DMV. They also have light and dark modes, according to Reviver’s website. Thanks to an accompanying app, they act as additional vehicle security, alerting drivers to unexpected vehicle movements and providing a method to report stolen vehicles.
As part of the new digital plate program, Reviver touts its products’ connectivity, stating that in addition to Bluetooth capabilities, digital plates have “national 5G network connectivity and stability.” But don’t worry—the same plates purportedly protect owner privacy with cloud support and encrypted software updates.
5 Reasons to avoid the digital license plate | Ride TechFrom Youtube
After the Rplate pilot program was announced four years ago, some raised questions about just how good an idea digital plates might be. Reviver and others who support switching to digital emphasize personalization, efficient DMV operations and connectivity. However, a 2018 post published by Sophos’s Naked Security blog pointed out that “the plates could be as susceptible to hacking as other wireless and IoT technologies,” noting that everyday “objects – things like kettles, TVs, and baby monitors – are getting connected to the internet with elementary security flaws still in place.”
To that end, a May 2018 syndicated New York Times news service article about digital plates quoted the Electronic Frontier Foundation (EFF), which warned that such a device could be a “‘honeypot of data,’ recording the drivers’ trips to the grocery store, or to a protest, or to an abortion clinic.”
For now, Rplates are another option in addition to old-fashioned metal, and many are likely to opt out due to cost alone. If you decide to go the digital route, however, it helps if you know what you could be getting yourself into.
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Steve Huff
Steve Huff is an Editor and Reporter at dot.LA. Steve was previously managing editor for The Metaverse Post and before that deputy digital editor for Maxim magazine. He has written for Inside Hook, Observer and New York Mag. Steve is the author of two official tie-ins books for AMC’s hit “Breaking Bad” prequel, “Better Call Saul.” He’s also a classically-trained tenor and has performed with opera companies and orchestras all over the Eastern U.S. He lives in the greater Boston metro area with his wife, educator Dr. Dana Huff.
steve@dot.la
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