Chapter 13 - Building the Right Relationships with the Board and VCs

Abstract

This chapter discusses the importance of building the right board of directors and maintaining good relationships as the company grows. It also discusses the value that venture capitalists (VCs) bring to the fabless company from a network and relationships points of view in addition to the venture capital that they bring. Although many semiconductor companies, both fabless and integrated device manufacturers (IDMs), currently possess highly effective boards, many semiconductor company boards probably would not make anyone's “top ten” list. Companies must attract and retain board members who have sufficient time available to do a first-rate job. Fabless company boards must assimilate information quickly and react rapidly. They must be attuned to the market; have close relationships with their foundry and assembly/test partners; and have multiple links to sources of capital. A VC's general business and transactional experience may be useful to the entrepreneur in a variety of circumstances. A VC with an impressive Rolodex will benefit the company only if he or she is willing to use it on behalf of the firm's portfolio companies. Open and honest communication between the entrepreneur and the VC is the key to a successful, long-term relationship.