Can you afford a chairman? Or can you afford not to have one?

I often meet people involved in business startups who say to me, we  know that it would be a good idea to have a chairman, but right now we can’t afford to. One of them came back to me a few weeks later to say, we need a chairman now because a potential investor is insisting that we have one.

So what does this tell us?

  • Startup businesses know they should have a chairman
  • They say they can’t afford one
  • Sometimes an investor forces the issue
  • Then they take action

According to the Institute of Directors, 70% of non-executive directors are interested in investing in the businesses whose boards they sit on.

So if you are saying to yourself, I may need a chairman, but not yet ask yourself this:

  • Are there issues I am avoiding in the development of my business?
  • Am I confronted by the prospect of those issues being resolved by a more effective board?
  • Can I afford not to have a more effective board?
  • Am I willing to sell equity to get the right chairman?
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