There is an endless amount of advice on the subject of board composition out there, but the reality for venture financed companies and pre-venture companies is very different. The archetypal situation for venture financed companies is for each VC to have a seat on the board, the CEO to have a seat and perhaps one outside industry person. As successive rounds pile up, more VCs are added to the board. You can like it or not like it. You can think it is good or bad to have one or four VCs on your board. You can argue that you get the same input from all of them – so why hear it four times? But, in the end, they typically have big buck on the line; they own big portions of the business; and they have a right to be represented.

Having said that, with respect to companies that have not yet gotten venture financing, who you have on the board becomes more interesting, in part because you may have more flexibility. Sometimes if there is a large angel investor, this person goes on the board. Sometimes if there has been a financing raised from several accredited investors, the lead, or largest, investor goes on the board. But these are situations in which a majority of the Company is still owned by the founders. The founders can, and should, expect to be a majority of the board.

Also, in this circumstance, you may have more room to bring in outsiders than in the archetypal VC situation. In this case you can do more than just pay lip service to the idea that a board member should bring some expertise, contacts or other value to the board. It is great when you can find such a person. However, experience shows that big time industry luminaries are busy people. Even if you can get one on your board, you are not likely to get much bandwidth from him or her. Their big value add will be their name on the team slide in your deck. Frankly, I think this is a very overvalued contribution.

The best board members I have observed on early stage company boards have been successful industry players who do not fit the description of industry luminary. These folks typically do the job because they are older and more experienced than the entrepreneur and they like to mentor or because they get the vision and are believers in the business thesis or they have some other reason why they are willing to focus and give the entrepreneur time and energy. The ones who will really contribute are the ones you want. Choose wisely because you don’t have a lot of slots and you need to make progress.