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From Obligation to Advantage: Rethinking the Role of Boards in Startups

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Amit Pilowsky
July 28, 2025
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From Obligation to Advantage: Rethinking the Role of Boards in Startups

For many founders, a Board of Directors feels like a formality at best and an annoying checkbox at worst. A group that shows up every quarter to ask questions, second-guess decisions, or rubber-stamp what's already in motion. But this perspective represents a missed opportunity to ensure you don't miss out on critical strategic decisions and make those decisions in a more complete and competent way.

Experienced founders typically treat their Board as one of the most powerful tools they have. They use it to sharpen thinking, pressure-test strategy, and make better decisions under uncertainty, leveraging the board member’s experience and knowledge. But that's only possible when, as founders, you acknowledge the potential of a well-constructed board and approach it with intentionality - thinking carefully about who's at the table, when you formalize governance, and how the board functions over time.

This intentionality determines whether your board becomes a strategic asset or a quarterly burden.

Over the course of this series, we'll cover how to build boards that accelerate growth rather than constrain it, including:  

  • Choosing the right composition and managing transitions as you scale
  • Building functional committees and executive sessions
  • Structuring meetings that drive strategy, not just updates
  • Managing board conflicts and difficult conversations

This first piece focuses on the fundamental mindset shift required: understanding what boards can do for you, when to build them, and the early choices that set the foundation for everything that follows.

Advisory Boards vs. Boards of Directors

Understanding this distinction upfront shapes every decision you make about governance, because the two serve somewhat different purposes and require different approaches.

Advisory Boards are relatively informal networks of people who offer input, credibility, or access, but with no formal power or fiduciary responsibility. You control the engagement entirely both in terms of its intensity as well as in terms of how you decide to implement (or not) the inputs you receive.

Boards of Directors are formal governing bodies with legal and fiduciary accountability for the company's direction and decision making. Board members vote on financing paths, approve executive changes, compensation, strategy, and in general, have both influence and responsibility. They have the authority to affect change in management, if need be, including founders.

Many founders load up on advisory board to avoid the complexity of real governance. But if you're building a company designed to endure and scale, one that is designed to overcome bumps and obstacles down the road, you want to have a strong and well-equipped board of directors in place. And your board of directors' composition deserves careful consideration, not just acceptance of whoever comes with the funding.

Early Questions Every Founder Should Ask About Board Strategy

Before thinking about composition or structure, let’s get clear on intent. Founders who build strong boards start by asking themselves a few principal questions:

What kind of company am I building? One that is optimized for founder control, or one that is built to scale with real checks and balances? Optimizing for control often caps your potential. The best outcomes come from choosing challenge over control, building something bigger where you own a meaningful piece rather than controlling something smaller where you own a bigger piece.

What decisions will I need help navigating? Fundraising, executive hiring, market expansion, M&A scenarios, and so on. Do you have the right perspectives in the room to think clearly through decisions you've never made before, or maybe made once or twice?

What experience gaps exist in our leadership team? A good board doesn't replicate your strengths but rather complements them. If you're product-focused, you might need commercial or operational experience. If you're technical, you might need market or regulatory expertise.

How will my board evolve as we grow? Sometimes, pre-seed or seed investors lack the experience to guide growth-stage decisions. That's natural. But unless you're willing to refresh your board as needs evolve, it will eventually constrain you. So be upfront with early board members that composition may change - set this expectation from get-go in order to avoid difficult conversations later.

When is the right time to build a fully functioning board? Pre-seed is typically too early (three founders plus one investor isn't real governance). The right moment is usually before your Seed or Series A, when you can assemble five or more people who will provide value-add, and where founders maintain influence but aren't in complete control.

The Compounding Effect of Intentional Board Building

Some of the most pivotal decisions in your company's life will play out in or around the boardroom. What are the company’s strategic priorities, who you raise money from, when and how you scale, etc. A functioning board with the right engagement, experience diversity, and healthy tension, will push your entire team to operate at a higher level and thrive through the challenges a lot better.

Your board becomes one of the few structures in your company that scales with you, and one of the few rooms where better thinking directly changes outcomes. And this all starts with acknowledging that governance, done right, is a competitive advantage - not a constraint.  

Founders who embrace this mindset early, while still controlling who joins their board, set themselves up for better decision-making throughout their company's journey. Everything else - composition, structure, and dynamics - flows from getting this foundation right.

The choice isn't between having a board or not having one. It's between building a board that accelerates your success or one that simply fulfills legal requirements.

Next in this series: The fundamentals of board composition - who to choose, when to add them, and how to maintain strategic value as your needs evolve.

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