Israeli survey highlights challenges in startup boardrooms

Over 300 startups and investors took part in the Startup Snapshot report which focused on managing the board of directors

Israeli survey highlights challenges in startup boardrooms

Yael Benjamin, Founder of Startup Snapshot. Photo courtesy company

Startup Snapshot, an Israeli data-sharing platform for the startup ecosystem, announced the results of a new report of over 300 startups and investors, focused on managing the board of directors.   

With the influx of capital in the market, early-stage founders are raising massive rounds faster than ever before. The larger checks are accompanied by the rising expectations of increasingly sophisticated investors, forcing startups to manage the new complexities of a growing boardroom.

As a result, the board, which can be a strong asset for a new startup, often times becomes a source of friction for the CEO, creating more unnecessary stress and arguments than tangible value.

Main research insights:

  • Challenges in the boardroom are more common than we think. 28% of companies reported their board has vetoed a decision. 36% reported that they have a “difficult” board member, with this number jumping to 43% for startups that raised over $10M.
  • Startup CEOs are not open enough, with 61% of startups reporting that they are not fully transparent with their board members.
  • Searching for transparency, board members want more frequent communication and updates than their portfolio companies actually provide. Investors report that they want monthly one-on-one meetings and monthly progress updates from their portfolio companies, but only 30-40% of startups are actually doing this.
  • The board is a powerful asset for new ventures, yet CEOs don’t see the value. Directors overestimated the value they provide by 20% compared to what startups believe they are actually getting.
  • CEOs are hesitant to ask their board for help, seeing it as a sign of weakness. 81% of investors stated that they want their portfolio companies to give them specific tasks, but only 30% of CEOs were very comfortable doing this. As a result, startups are not leveraging the immense value-add that their investors can provide.

“We see that it’s tough for CEOs to get to a place of open and transparent communication with their board. They are struggling to switch from fundraising mode, where they are trying to impress investors, to this place of viewing them as board members that are going to see the challenges and faults, says Yael Benjamin, Founder of Startup Snapshot.

"2021 is the year of ‘Uni-Covids’ as young companies are raising massive amounts of funding. Startups should double down on the role of mentors and board members, working to leverage their wealth of expertise, rather than just report the bare minimum required," states Tzahi Weisfeld, VP and GM Intel Ignite.

“Founders should not treat the boardroom as the main update channel, but rather as the place where strategic discussion happens. By updating directors on an ongoing basis outside the boardroom, CEOs give board members sufficient time to prepare before the meeting and enable a more meaningful and focused board meeting,” states Eyal Miller, VP and MD Samsung Next Ventures.

***The report was created by Y.Benjamin Strategic Marketing in partnership with Intel Ignite, Samsung Next, Leumitech and Yigal Arnon & Co. 

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