Founders often think about board meetings in a very unstructured way. The premise is that let’s meet up and chit-chat informally. That’s okay for the first year, but eventually, as investors get involved, it’s a good idea to get some sort of a format in place.
First off, what is a board of directors? When you have a company, it’s often legally required that the company has a board of directors. It’s an elected group of individuals that represent the shareholders of the company. The board is a governing body that meets at regular intervals to set policies for corporate management and oversight.
In startups, the board of directors usually has a few founders representing the group of co-founders, few people from the investor side, and few independent members. They are generally appointed by a mutual understanding between investors and the founders. A typical size of the board is five people, six or more being a less apparent size at the early stages, but four or less being a less likely size when the company starts to generate millions in annual revenues.
Cadence of meetings
Startups usually have meetings on a six week to a bi-monthly cadence. Once a month can be overkill, as things might not have developed much during the period. If the company conducts something that requires the board’s attention regularly, meetings can be organized more often.
Face-to-face meetings are the best format, as those situations are a great way to build rapport with all the members on the board, and to have a better “read of the room.” It’s commonplace to have Zoom board meetings once or twice a year, especially if the board members are not living in the same country. But still, it makes sense to organize physical board meetings as often as possible.
Before the meeting
It’s beneficial to set the board meeting dates at least 30 days before the meeting is supposed to happen. The earlier, the better. We’d often schedule board meetings for three months in advance so that we’d be able to book the data in all the board member’s calendars. Also, an early booking allows the board members to plan their schedules accordingly. If they’re traveling for the board meeting, they can book hotels, flights and other meetings in the same city, around the particular date.
Send you board meeting material at least four working days in advance to the meeting so that the board members can thoroughly go through the material. They’ll also have time to react and prepare questions/topics for the discussion that will happen during the meeting.
I’ve seen many iterations of the board meeting agenda over the years of being a founder of VC backed games companies. I was on the board of Next Games from the founding date until I left the company in 2019.
Here’s an agenda suggestion that works well for a games company board meeting.
Here the CEO gives a general update on the company, the essential items, and developments that have come up since the last meeting. If the company is doing a fundraise, an overall picture of the fundraising situation, likelihoods, and different scenarios laid out.
If the company has a crisis going on or issues of severity, regarding people leaving, a project getting canceled or killed, those should be on the CEO update. The items can be covered later, but it makes sense to talk about them as early as possible.
If there are specific topics that will require the board’s special attention, you can point out the Goals for the meeting. That will help the board members to focus on the most relevant topics.
To summarize the CEO Update
- General update
- Goals of the meeting
Before moving on from one section to the next, it makes sense to ask for questions and comments.
Games and Projects Update
With gaming companies, it always necessary to cover the situation with the games. You might have games in the early concepting, in development, in a soft launch, or globally live. You want to talk about the games that aren’t live yet because that is often the place where gaming startups are allocating resources and capital.
The live games (globally, then soft launch titles) should prioritize the games update section of the meeting. They are the bread and butter of a gaming startup and the primary stream of cash. No one at the table wants to raise more funding. Even the existing investors would instead generate value for the current stock that they have in the company, through revenue growth.
What to talk about when it comes to the live games:
- Cover KPIs, highlight changes to UA, retention, and monetization
- Give an overall status update on the game, what has changed for the positive and the negative
- Give out a forecast for the next few months, highlight activities and measures that have been taken
- Roadmap for the next few months, both for product and marketing/UA
- Talk about the budget of the game, and give out some targets, especially around revenue
- Finish off with screenshots of new features and content that is coming soon
When covering the games that are in development, you should talk about the roadmap and the decisions you make. What data do you now have to make these decisions? It’s always beneficial to be open for a discussion when it comes to the design of the game, who you are making the game for, and how you are validating what you are doing.
For example, revenue estimations on games that haven’t been soft-launched properly aren’t usually going to matter until you can get some concrete numbers, which typically start showing up after months into the soft launch.
New concepts are an excellent topic for a game company to bounce ideas around in the room. Granted, if you have many people on your board who aren’t gamers, who haven’t worked operationally in gaming, it can be hard to get actionable feedback on your concepts. But it’s a great way to get your board members involved and curious about what you are doing. They will be better able to communicate your company’s products to their contacts and play a role as ambassador in events where insight into your products can play a decisive role.
Summary of the games update
- Live games update
- Update on games that are in development
- Game concepting update
Start by going through your P&L, short for the profit and loss statement. In a startup, it makes sense to track these on a monthly term.
The P&L table should include the following sections.
Financials per game per month:
- COGS, short for “Cost of goods sold”. These include servers, platform or publisher fees/cuts, UA spend, and other external services directly attributed to the particular game.
- Gross margin in $ of the game, which is revenue, minus the COGS.
- Gross margin % of the game, which you get by dividing the gross margin mentioned above, with the revenue.
Then separately, highlight the company expenses and finally EBIT.
- Personnel expenses, which includes salary, social expenses, and holiday pay
- OPEX, aka. operating expenses, including voluntary employee expenses, office, IT, travel, marketing and sales, r&d expenses, legal and accounting, and other administrative expenses
- EBITDA, which is gross margin + personnel expenses + OPEX
- EBIT, with depreciations + EBITDA
Then on a separate slide or slides, it’s imperative for startups to visualize the cash position, forecasted at least nine months into the future. One of my favorites is to have one slide with a budgeted forecast of the P&L table and a separate slide with a line chart showing when the company will be running out of cash.
All this information will be valuable for the board to determine when is the right time to raise the next funding round.
Summary of the Financial Update
- Share the P&L
- Cash coming in and cash going out
In this section, other items, like stock option allocations, should be covered. This part of the meeting is also the place where a lot of free discussions should happen. I’ve learned to appreciate this one section that can be covered in the Other Matters part of the meeting: “What is the CEO worried about?”
“I had board meetings every six weeks. And for me, the board meeting was a chance to take a step back from the day to day business and say, ‘Okay, what am I worried about?’ That was the great thing about Mitch [Lasky, who was on the board of Playfab] is when he said that, ‘I don’t want you to spend your board meeting telling me how great things are. I don’t care about that. But I want to hear at every board meeting what you’re worried about.’ And so I would always go in the board meetings with literally a slide like: Here’s everything I’m worried about today. Bullets with all my fears, and then we spend most of the board meeting talking about the fears.”
“I would talk about some data, metrics, and KPIs and how we’re doing. But ultimately, most of the time, we’d talk about the fears, which was always very helpful because we’d always come up with new ideas and new insights, with the board’s support to go into something. Those are very helpful. And I think that’s what a good investor is going to do is you’re going to keep the CEO focused on the most important stuff and not letting get lost in the weeds.”
“Transparency is one of my core values. I applied that not just to my employees but to my board as well. Sometimes there is this attitude of how the investors are like not on your side like they’re the enemy, and that your job as the CEO is to hide from them the reality of what’s going on. That’s missing the point: if you’re hiding anything from your board, either because you’re ashamed, you’re afraid, you’re going to be freaked out, or you’re afraid they’re going to hire you a CEO or something.”
“First of all, you’re going to get found out eventually anyway. There’s no point in hiding anything. And then two: you miss an opportunity to use them to help you make better decisions. My attitude with going into every board meeting was, “Hi! Here’s what I’m worried about. Your job as the board is to help me figure out what we’re going to do together. They’re all on the same page: if I’m successful, you’ll be successful. And if I fail, then you’re going to fail to. We’re all in this together. I never felt any insecurity about hiding anything or needing to be anything less than transparent.”
Remember to reserve lots of time on the agenda for the discussion. The board can also highlight topics, and they should be encouraged to do so.
Template for agenda
Here is our board meeting agenda template; you can use it to structure your board meetings.
Go here to get the Elite Game Developers’ board meeting agenda template.
The board meetings are a useful tool to keep you disciplined. You will have to present your results and your plans every six weeks to a group of people who can help you to take bold steps. There’s so much value because it also brings much accountability to the table.
Board meeting minutes
What are board meeting minutes? They are the notes from the meeting that represent the historical record of what the company has been doing overtime. They are legal documents required by law, as they show how the company has been governed by the board of directors.
After the minutes have been drafted, the CEO and chairman should review the draft and suggest edits/changes. If the company has trusted board members, with legal expertise, it makes sense to involve them in reviewing the draft, as it will become a legal document after it’s been signed.
Before each board member signs the minutes’ document, it’s good practice to let them review the minutes. After the minutes have been signed, they should be stored as PDF files into a document filing system like Dropbox, Box, or Google Drive. Remember to keep backups of the files.
Where can the minutes surface? When the company is doing a fundraise, the new VCs will want to conduct proper due diligence on the company and review previous board meeting minutes for any discrepancies. The same goes for a buyer. If someone ever shows up with an offer, they will want to make sure that everything in the company is in order.
For you to be able to make proper meeting minutes, we’re now going to go through some important topics regarding the minutes.
Keep the board minutes “light”
Board meeting minutes should never be treated as word-by-word transcripts of the meetings. The document should be an easily digestible summary of the most important actions, decisions, and points made during the meeting. Focus on the results of discussions and not the back-and-forth of who said what. Record the length of discussions and summarize the outcome, but don’t get into every detail.
For example, this would be too detailed:
The board entered into a 20-minute discussion on the launch of the game. Board Member X suggested we double the budget to hire more staff on the game team. Still, Board Member Y disagreed and suggested leaving the budget as is until the end of the year, stating, “the game team is already big enough, compared to what the other games companies had.” Board Member X then argued that …
This version is more appropriate: 20-minute discussion on the launch of the game. Motion by Board Member X to increase the budget to $4 million until the end of the year. Motion seconded and approved.
Recently funded companies that are just starting to have board meetings should ask their outside counsel from their legal firm to act as the secretary and take notes. Granted, there will be some expenses from them showing up to the meetings, but it’s a great way to keep the counsel in the loop.
Also, the minutes do require much knowledge about the minute practices, such as rules for reaching a quorum. Quorum is the number of shareholders that must be present to make a decision. Whether or not you have a quorum present must be recorded in your board minutes.
Items to focus on
The following format is something I’ve become accustomed to:
- Time and place of the meeting. If conducted over Zoom, it’s customary to call this a “Telephone conference.”
- Attendance, which can be as easy as just writing down who is there and who is not
- Agenda of the meeting should be mentioned
- Review of “old business,” anything discussed in a previous meeting that has not been resolved
- Discussion of “new business,” any new items that need the attention of the board
- Other matters
Template for minutes
Many founders have been requesting me to write a meeting minutes template, so here goes.
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