Where do people find "outside" board members? I assume the term "outside" here implies someone who isn't longtime friends with either founders or investors, but someone who does have the respect of both. If I was a founder who wanted to build a board, how would I go about finding the right person?
You would look for someone with experience in the area you want to operate in, or maybe someone from a complementary sector. The role of the board is to look at the company in the larger context, i.e. within its market at large, and within its general industrial sector. You also want someone who has a good track record hiring executives, so that they can broaden the circle of people the CEO might hire from.
Your investors, by their virtue of having money, don't necessarily have experience in your specific market, so it's good to bring outsiders that are more interested in seeing the company succeed period, rather than maximizing their own investment, as investors are.
This sounds right in term of what to look for. But what are the mechanics of the search?
It seems like something really personal for the company--and yet founders are often not likely to have great independent board candidates that they have long histories with.
Investors are much more likely to know great independent board candidates--so how do you structure a search so it yields the independents are 1) as good as you need them to be and 2) not actually just more investor seats on the board?
Unless you're already accomplished with a previous track record, you're probably going to be looking for advisers before investors, so usually as a founder you've already asked tons of people for advice. Or you should have, anyway. :) When talking to such people, you have to keep in mind that you'll want to recruit people for a board one day. It's really a socializing and networking thing.
My guess would just be to research experts in the field of the startup. This person wouldn't be an investor but they may have some interest in the startup succeeding. Someone with domain expertise on the board makes a lot of sense.
