Transitions of Leadership: Challenges and Considerations in Installing New Management | LSI USA '24

Joe Mullings  0:04  
Well, thanks for probably cutting your lunch short and missing out on that beautiful sunshine out there. Appreciate it. If my panel could just introduce themselves their backgrounds and maybe share perspective from where you'll be offering your insights on these questions.

Mark Christopherson  0:20  
Sure, I can start Mark    Christopherson longtime Medtronic employee, early founder of inspiring medical and early in my view, you know, VP of r&d phase. And then now second time CEO of a company that's a spin off out of Deerfield Catalyst.

Zoar Engelman  0:37  
I'm Zara Engelmann. I'm Chief Science Officer of Deerfield Catalyst, and also of Korea. Those are medical device incubators. So we spin off companies and hire people like Mark    Christopherson, to run them and get my perspective from from the foundry angle. And as well as being an employee at one of those companies and having a new CEO Come in.

Terri Burke  0:59  
Hi, everyone, I'm Terri    Burke. I'm a venture partner with epidemics capital where I lead the med tech practice. I'm also a startup, co founder and CEO. I did that for five years. So I've been on the startup side of things, and I have an operating background. I was on the senior leadership team at Edwards Lifesciences for over a decade. So I think I can bring some unique perspectives from a couple of different approaches.

Joe Mullings  1:24  
Super. So let's start out with a stat just to set this up. An HBs study showed that when the CEO remained constant, senior level management turnover was 16%. Annually, eight and a half percent of that was voluntary, and seven and a half percent was involuntary. And the case where the CEO change and an internal executive move to the top slot, the involuntary leadership jumps to 12 and a half percent from seven half percent. And that's an increase of about 65%. And then a greater disruption occurs when a new leader comes from outside, which generally happens in only mid performing low performing firms. Hence, the CEO replacement, as high performing firms almost never replaced their CEOs, the turnover, average 26%, almost four times the rate when the CEO did not change. So those are those are substantial stats, whether it's a small cap or a large company. So in the audience here today, we have a lot of individuals who might be first time CEOs, or founders. And statistically speaking, 80% of the men are going to get replaced. So surprise. We chatted about this earlier, Terry, that replacement. How do you think about handling that? And as an investor how, during the investment process, the diligence process? Do you crack that question to the potential Founder CEO that this is likely to happen? Statistically?

Terri Burke  2:55  
It's a good question. Well, first, I would say, if you're a founder, CEO, and there's a replacement plan, it's not necessarily a bad thing, it doesn't necessarily mean you're not performing well, or starting a company up in a positive way, it may mean that your company is grown and graduated and need some different skill sets. But from the investment perspective, we think a lot about team we invest at the seed and a stage. So we often are working with founders, scientists, physicians, and they're very important at that phase of a company, right, you really can't build a technology or a company without really strong scientific and medical expertise. So it's often an advantage for the company early on. But if we see that the individual maybe has some of those important qualities, but maybe not the ones we want to see longer term in terms of board management, understanding how to fundraise handling a lot more of the diversity have a role like CEO, as investors, we may have that conversation very early before we agree to invest so that we're aligned, and we can say, hey, this a stage makes a lot of sense for you. But we'd like to see a transition plan or be clear about that. Sometimes, if we start a company early enough with a founder will help recruit the CEO at the same time, but I would say in general, VCs wait too long to change CEOs to see the technologies grow and the companies grow.

Joe Mullings  4:25  
I want to come back to that that statement as well mark your insights on that as far as how do you handle that conversation with the incoming CEO? And in fact, did you have that conversation as you just got moved into the role? Yeah,

Mark Christopherson  4:37  
I changed CEO roles about a year ago and that was the type of thing we graduated to the point of preclinical where it was okay, we're ready to hire one of the commercial side of people marketing early sales type of thing. So as you know, I hear those people are just a new candidate coming in hire their team. So they can pick their people versus by hire them they're not, you know, stuck with that group of People that I brought in the same time the culture changes at that point to now you're looking at more of a commercial organization that people that are early startup people tend to, you know, decide if they want to stick around, or if they're moving to another early stage startup.

Zoar Engelman  5:15  
So, yeah, I think to reflect on what Terry Mark are saying, you know, the medical device companies go through kind of natural transition phases, you know, from the very beginning, started the napkin, through initial derisking, to larger clinical trials, regulatory and ultimately commercial, and the kind of talent and people that are good at one phase aren't necessarily the same group that's good at the next phase. And I think deep down, most of those people realize that, and people stay too long, including management team, etc, they become kind of unhappy with the trajectory, they sort of really end up realizing it's sometimes a hard way, there's sort of this ownership feel that when you start a company, or you've been at company for a long time, you want to see it through, you feel like it's your baby. But very frequently, you know, you're better off having new babies and letting somebody more professional take care of your old one. Oftentimes,

Joe Mullings  6:07  
too, it's fun to use the word baby, those founders, and usually their CTO is turned CEOs don't want to be told that their baby's ugly. And it is ugly, especially when you're running through the earlier stages. Terry, you had mentioned that we usually wait too long. Give me some examples that you've experienced, as well as what you watch from the sidelines as to when were the triggers? And when should they have made the move?

Terri Burke  6:43  
Now, it's a good question. I would say sometimes as a, as a venture capitalist, when we're listening to pitches, and a company has moved maybe beyond the seed or the a round, or they're really moving towards the next inflection point, there is a subtle difference in the in the pitches that a person who's come up through the business side, or marketing or sales has versus someone who's more technical or a physician, for example. So you can see that the creativity that's needed to approach the value proposition in the market isn't quite there. So that's one, one thing we see that we can identify and say, I wonder if there's a transition plan in place? Or how is this individual surrounding herself or himself with the right leadership team to fill in some of those capabilities, because that's another way to do it. But in terms of being late, I mean, one of the challenges is that when you're at a seed or an a round, like I said earlier, that founder, person who's got that technical and medical or clinical background is really valuable. And so they may be able to raise an a round. But increasingly, as you get to the bigger rounds, the team needs to look different. And so it becomes the chicken and the egg problem of does the company have enough money in the bank to attract a new CEO? Or do you need to raise that next round in order to get that transition CEO, and companies sometimes fall in that valley, where they're really struggling, and if they're really trying to fundraise, and they have an interesting idea, but they're just not getting the interest they want? Sometimes with VCs, it can be team that the VCs are hesitant on, and it's a lot of work for a VC to put out a term sheet, and then have to manage a CEO transition. So sometimes, VCs will just wait and see what happens versus investing. So if you struggle to raise capital, really look at your team and say, what are our skills and capabilities? Do we have gaps? And how can we fill that with the cash we have?

Joe Mullings  8:52  
So are from your perspective, what signals have you seen that you just know that CEO should have been replaced? But what has been the barrier to replacement oftentimes?

Zoar Engelman  9:04  
So you know, as founders, I think Deerfield Catalyst Korea, we take a fairly unique approach we have instead of we're all serial entrepreneur has been set of singular founders, we have a team around it. So medical science, technology, finance. And so we take this strong approach of basically working together to advance a company as far as it can. Before, you know, we believe it's headed in the right direction, are delays in hiring CEOs have usually come in finding really the right fit for that company, and identifying the need whether it's regulatory commercial, or even that CEOs experience and sort of cultural fit with the team. And so where we've delayed and you know, as a, as an incubator, we've been able to keep companies sort of moving forward in the correct way until we found that person. But you know, when we do find the right person for the phase so market serves as an example of one of our latest And out, you know, we find that we transition to that person, you know, very quickly and efficiently.

Joe Mullings  10:05  
But do you find yourself and again, that's a little bit of a different construct with Catalyst. When you find yourself and I run across this, when we get calls on that, I've got somebody moving into a B ran, or C rounds, a clinical left with a commercial build, or at least go to market strategy. And we've only got enough runway in the bank for eight months. And we want a CEO who either can raise the money, and who's crazy enough to come in with eight months left? Or do we sit in the pocket with the person we've got? And that, that I wonder what goes through the mind of the investors?

Zoar Engelman  10:43  
I think we talked earlier about the board interaction with the CEO, right, and getting, you know, open communication, maybe a board chair that can kind of lead that discussion with the CEO, I think it's important to have that transparent communication. And maybe it's not all the way down to the full team, but at least at the CEO and the board are in alignment with like, Okay, where are the gaps? And what's what's the right transition point hand this off to the next CEO so that we don't lose talent. And we kind of maximize the success of the company by doing it that way.

Joe Mullings  11:16  
Have I have been the board ran through this very recently, replacement of a CEO, and the Board did not believe that there'd be any attrition. Once that founder slash charismatic slash team builder for what was in there today was going to be let go. And the board thought that the rest of the organization was mature enough and professional enough not to leave. So other than being hallucinatory? How would you manage that? If that was your investment, and you were lead on that?

Terri Burke  11:56  
Money started. And

Zoar Engelman  11:57  
then I think, for me, it's like, it's making sure the team is aware that this is a successful transition, there is going to be some social capital, right, that you've got the culture that the first CEO brought in, people really liked that culture, they came to work for that CEOs. Now it's a change, I think, if you can somehow transition the team, not rip the band aid off, but somehow bring them in Okay, over the next six months to be a transition that can warm up to that transition. And then making sure there's some sticky factor with the new CEO give that person time to acclimate, because it doesn't happen overnight. It really is a six month process.

Terri Burke  12:34  
Our companies are usually a little bit earlier in that they're still building out their team and their hiring. So I think that comment was made by Marc earlier that allowing a new CEO to make the hires is important. But we've had scenarios where, you know, a founder has raised a first round of capital, and then feels very good. Having done that. And through the SEO process can actually be a little problematic, and that it's easy to poke holes and all the things that you think a potential candidate doesn't have. And so we've had one where we actually asked the founder to step out of the recruiting process and allow the board only we had started saying, it would be great to have this founder, early on meeting the candidates, but we found it was distracting. And that the founder really wasn't able to think about how a person could complement the skills that the founder had, and instead was really looking for reasons not to hire someone. So I think it can go both ways that you can stymie a process, or you can struggle to retain talent. So you're that's, yeah,

Zoar Engelman  13:45  
we, you know, we've found that, you know, there's sort of two approaches, and we also transition early stage, and I hope we do a nice job with while commuting and transition. That's the, the mark may say differently, but I think, you know, getting the employees involved, especially those early employees who, you know, they may be the first five people and you know, you're gonna hire another 1520 plus people in the next couple of years, but actually getting them kind of bought in as a critical stakeholder into the process, it can really help smooth that transition over that we've had instances both ways where employees are sort of more involved in you know, their feedback was actually heard by the hiring group. And there are other cases where you know, the board really select somebody that they think is right, they really didn't get feedback or really understand the operation of the company enough to be sensitive to what people want, you know, wanted and that kind of cultural fit. It

Terri Burke  14:45  
can be a hard conversation to with the founder who's done great work right come up with a really innovative technology understands the the clinical condition well, but I think being open as a founder to the important So staying on for us at epidemics, we love it when our founders remain part of the company, but maybe it's in a science role or a technology role or a medical officer role. So we're rarely looking to completely remove someone, it's just to allow the team, the management team to expand and grow and be stronger. But I think sometimes those are hard conversations. So I think I wish VCs would do it earlier and often. But I also would say, if you're out there, as a CEO, don't be afraid to ask that question of a potential VC that's looking at you, I think it shows a lot of maturity, I think it shows a lot of forward thinking. And you might end up with a really nice dialogue that ultimately allows your company to succeed. So

Joe Mullings  15:45  
that sets up another question. After this one, they're related. Why is it that almost without exception, when a board choose to replace the CEO, they bring a new CEO in process goes pretty well. And they basically say, here's the keys, there's a some sandbox, go get them. And there's no legitimate legitimate Transition Plan, nor a follow up at 60 days, 90 days, one ad, without having a coach in there, when you could be looking at 1015 40 60 million, and a coach could run you maybe 50,000 For the season, that would ensure your investment, and a lot better way than if you didn't, and I'm just I'm confounded after 32 years in search, that I've not seen it done more than once. Or I think even

Zoar Engelman  16:39  
for the whole team, a coach is needed to transition, right, I think, you know, really just kind of it's not just for the CEO, it goes both ways, team, you know, what are their emotions with the change and managing through the change, to make sure that those people stay committed to the company, and make it through that to the other side. And don't don't leave the company. And I think for the new CEO, it's also very difficult because they're, you know, handed the keys, but they don't know what key works on what, and have to learn all that quickly. So I think having someone facilitate that between the prior CEO, new CEO and team, which is an important factor of it, and board, I think getting the board acclimated with the new CEO is also an important change of appoint

Joe Mullings  17:20  
material. How can you do that? Yeah.

Terri Burke  17:23  
So I think, a couple reasons. One, sometimes it's cash. I mean, quite honestly, especially if you're at a seed or a small a round. You know, I think sometimes it's about the experience on the board. So if you have just institutional investors on your board, they've seen a lot, but maybe not necessarily been in the trenches in an operating role. So sometimes I think VCs think they can be that coach, and they can navigate, which can be harder sometimes for a board to be interacting with employees of a CEO and trying to figure out what's going on. That's, that's a bit of a challenge. So I would actually argue for at least one to two operating people on board to provide that perspective that, hey, you know, it's money well spent. It's $50,000. On, you know, maybe $40 million raised. So I think sometimes it's just we talked about the experience we want in the leadership team. But are we really thinking enough about what do we want on a board? Because when things are going really well, in the marketplace, I would argue, a board is not necessarily super active or needed and in every day manner. But when markets are hard, like they have been in the last 18 months, suddenly boards are overwhelmed with work, and it's a lot harder, and then you find your board is lacking the skill sets you need, and

Joe Mullings  18:46  
in this environment, and we'll put this in your laps, or I find oftentimes board members have way too many boards, they sit on they're distracted. And it's the biggest fire of the week that gets the attention. And so as our what what have you seen, and then the rest of the panel here? Are there too many board seats for board members right now?

Zoar Engelman  19:16  
I think well, not being a VC or having to sit on multiple boards may be a difficult question to answer. But I think what we see is, I think to reflect on what Terry was saying, having board members with operational experience, everyone who's operate a startup or business unit or bigger company, they have seen multiple fires across their their entities under their control, and they sort of are accustomed to dealing with it from an operational perspective, not one that's purely financial. And where we've seen success in the past is actually having a very strong chairman of the board with operational background, not necessarily being an involved board member, you know, didn't what's called a board members like working closely, but really one that can sort of guide the rest of the board on plan of action can advise, practically, with the CEO on how to sort of navigate those difficult waters, we found that to be very, very beneficial in our companies,

Joe Mullings  20:19  
with more and more technology coming out of Europe coming out of Israel, coming out of the UK, that is ideated there, and then is on short here, because this is the big market that most of them are gonna have to go after, and typically comes out earlier than usual. Maybe even preclinical cultures are tremendously different. What of your extends, are you and I just got back from Israel? And we have these conversations with a couple of VCs there, and they're sort of getting it now. What, what do you watch for what guidance could you give about that sort of cultural shift that is dramatic, where the essence of the technology is a US, yet the clinical regulatory go to market is going to be here in the US.

Zoar Engelman  21:07  
I think that, you know, and especially reflecting on our trip to Israel, and sort of the great innovation that's coming out of there, that and it goes back to what we were saying that at different stages of a company, you know, co founder has a very strong role to play. And that role can continue. But, you know, the hard thing is, is really to have that frank conversation with that individual and say, you know, the time to transition out from, you know, where you are, and where you want to go is probably now, and in the ideal case, of course, they can remain involved on a technical side, or even sort of morale side, you know, in terms of mission of the company, and, and, you know, kind of guiding principles in a way of the effort. But, you know, I think it's an I think a lot of the geographies, I guess, where it's perceived as maybe founders to be a problem are also geographies that are, you know, kind of respect frank conversations with people. So I think having those difficult frank conversations will probably be welcomed, although difficult, and can ultimately lead the company in the right direction, through

Joe Mullings  22:17  
your experiences that are,

Terri Burke  22:18  
yeah, not not so much. I mean, I think the themes are the same there. Those early conversations is frank conversations planning ahead. So if you want to see if you're founding a company, and you want to see it succeed in five or seven years, map that out, you know, by year three, what do you need? That might be new talent? Or will you pick this up by a consulting agreement? Or do you really need a full time person? I think the themes are the same. But culture matters. And I think Mark has experience with kind of culture changes and what that looks like, and how you have to navigate it.

Joe Mullings  22:57  
Work thoughts.

Zoar Engelman  22:58  
You know, culture is really what drives you know, success in a company, right, that can do culture to get a very small team to do mountainous projects, right. And so that's really, I think, the founder, founding CEOs job to build that culture. And that, you know, you can do a lot with a small team, when you have a very, you know, focus group that all has each other's backs and worked very hard together. And that's that culture is probably at risk when you do the transition. That's probably the biggest risk I see when you transition CEOs, the employees are all thinking, Okay, how is the culture going to shift and I think, very concerted effort to maintain the culture wherever possible, but the company is growing, right? Some people, you know, want to work for small company don't don't like the medium sized company, right? So, but I think managing to that maybe with the with an external consultant would come in and help, you know, how do we set up things so that they, as much as possible, maintain a culture that people want to stay with? is important.

Joe Mullings  23:58  
As you transition management into a new management team, it might be a single person or a group of people. What does that communication cadence need to be not nice to have? And then how does it appear? Is it a one pager every week for the first eight weeks, then going to every three weeks? What does that look like? Has anybody enacted that mechanism in place? Red light, green, light, yellow light, this is where we have our problems. This is what we've got under construction. So

Zoar Engelman  24:27  
yeah, I think, you know, when we bring on a CEO, it's sort of we lay out the status of the company where there needs to be hires, we feel very strongly that as much as possible new CEO should bring on their team to fill gaps and you should not sort of burden them with hire for them or even sign large service kind of contracts, you know, on their behalf as much as possible should let that person but you know, what we've done in the past is and what we do now is it's really have regular conversations daily. weakly several times a week early on, make sure that person knows get involved in early meetings and sort of, you know, the team is sort of, you'd have to prep the people in the company that, you know, somebody's coming in, and they're the right person. And you really need to own that transition of leadership and make your people feel very comfortable that who's coming in is the right person for the company, and will sort of lead it in a positive direction, and help that company achieve its kind of goal.

Terri Burke  25:29  
We've used a little bit of a maybe hybrid approach. So not hiring coaches, again, we're pretty early, and usually cash is a limitation. But on the boards where we do have someone with operating experience, sometimes we provide a short term consulting type role for a board director with an operating experience to work directly with the CEO, and be that coach and that early voice for a transition and to be checking in. So less formal than, you know, the full check in red light, yellow light, green light, but someone on the board to kind of own that piece for a period of time. I've seen that work well. And I've seen it get extended longer than maybe it needs to, as well. So you know, again, I think what the planning is, do you have you can bring someone in or put someone in that role, but how do you sunset it? Like when do you know it's done. And sometimes they think that's hard. And then over time, you can have a familiarity, where you're not getting the right feedback to the individual because there's such a close working relationship. So I think the planning piece is probably what we're not so good at.

Zoar Engelman  26:39  
I think is a new CEO coming in, it's been a great transition for me coming on board with the DFC Driffield catalyst team, they've been really gracious, it's their baby that they're handing off. Right. So being aware of that. But I think then lots of communication, you know, the first month's having a one on one with individual board members, you know, just to kind of get their pulse on things and learn from them. And then, you know, weekly meetings, we had weekly meetings, but those kinds of slowly fell off where, you know, not as necessary, but it's still great to have the broader founding team involved with the company. And it's great to know that I can call them up at any point and say, Hey, we have a question for you. Or How'd you guys come up with this answer? You know, and it's great to have that history with the project long term. And they're still our biggest cheerleaders, which is great. So

Joe Mullings  27:26  
so I know in the audience, there are probably some CEOs that have a question newly minted I know I've got one. Great One here, I want to ask him about who's taking over the helm, twice, and companies in transition, his leadership, but first before any questions at all, that somebody, anybody has it all for the panel right now. Todd, usin, call you out. You're always great for this. Time, so So you moved in out of an Olympus presidency, to active surgical. And then now over to another publicly traded company. Tell us about what you've learned. One is a president of a large corporate entity, and then into a very small startup. Can I get him a mic? And then the move now to a public company? And what what were the best stuff? And other than where you are right now, what was not the best stuff? Sure.

Todd Usen  28:21  
Thank you. And it entertaining, the crazy recruiting firm that pulled me out of this big, huge company that I was had the opportunity to run it, you know, $4 billion, p&l at a nice company, brought me on to the startup world with five months before they needed to raise and I said yes, so that's my own fault. But I really believe in the technology, and I believe in the firm that puts you in place. What I learned quickly is, no matter how great my investors were, and how one I really were, and they helped me get other investors, they gave me great advice. Without an independent board member, it'll fail. Because no matter what I mean, at the end of the day, you still all get judged, like a CEO gets judged to produce numbers. Investors get judged to protect their money and make sure it grows, doesn't matter. So if you're not there tomorrow, they still have an investment in the company they got to. So having operators on the board I think is critical. But not even a little critical, really critical because it's a rare, really lonely job being a CEO. If you don't have someone that you can go confide in and they can fuck can confiding. I trusted all of my investors because they trusted me. So don't get me wrong. It's really a good relationship. But someone that's also just run a business. Now there are great investors that had the opportunity to also run a business and be an operator, I'd go to them in a second. So from a CEO perspective, it's almost like instead of putting a coach down to help the CEO, I almost wanted to put a coach on the board to help the board. And I don't mean it with disrespect. I really mean it. And you know, to me, it made a big difference. I was not as successful in my first go around, because, unfortunately, everybody, even the person you bring in as an operator loved the company so much they invested. And like, I'll take their money, but now they're an investor too. So anyway, but moving from startup, there's certain phases. And one thing I absolutely agree with is, there's leaders that can take a company because they're great founders, I was very, I was blessed, I had a surgeon founded company had no desire to be a CEO. So I was brought in as the first CEO, then it works. Problem is, you still sometimes get to that point that there's still like, like you said, czar that they still want to have their hands and everything over time, and they're wonderful person and great tech. But as you're growing, their vision gets farther and farther, or the company goes farther and farther from their vision, sometimes because of logic, and maybe the way that you have to run a company. And then you still have to make those decisions of how do we slowly wean a brilliant surgeon off of your day to day operations. So those are the toughest parts, but worth it moving to a publicly traded company and moved to a publicly traded CEO role, with the knowledge that I can say this now that I needed to take the company private, because it didn't deserve to be public. It's you know, I was wasting my time in earnings reports and doing all this thing, because we weren't big enough to be public. But it's now if you allows ourselves to do the things we need to do so. grass is always greener, sometimes you jump at something, but jump at it for the right reasons. And if you have a great relationship that you put your CEO in place, that that makes a big difference. So I don't have it's not my panel. So no,

Joe Mullings  31:44  
but you are very unique, you have a very unique perspective on moving into two CEOs slots. And that sets up my question, Was there a question and up back there? So there's no CEOs back there who were just wondering if the targets on their back is hot red, or is just not let yet. Okay? So what if a CEO comes to you, it's a first time CEO or CEO in general and says, I want an independent board member on somebody, as Todd had pointed out, and I think we chatted about even before the session. And that was not a plant, by the way. So what if a CEO comes to you and says, Listen to construct to the board? Seems really great. However, I'm not sure that that is best for me as your CEO, what would you do?

Terri Burke  32:27  
I would love that if a CEO really had that foresight to think through what could make that individual more successful, or the company more successful. From an epidemic standpoint, we always welcome that. And we're always looking for the independent board director, and we're looking for the operating experience. But what I will say quite candidly, is it may come down to who the investors are and who has voting rights. And so we may want to have an independent director, but we may not be able to accomplish that we may or may not be able to accomplish changing out a CEO. So I would say when you're raising your capital really know who you're taking money from, and what the structure of the deal is, and and who owns the votes.

Joe Mullings  33:08  
So let me put a scenario forth here, it might seem like a silly question, I get calls very often on a weekly basis from CEOs or operators, who say you're retiring, moving out, and if you know, any board roles or advisory roles, that would could use somebody like me, and they, they want very little compensation, but they want intellectual jousting, and they want to offer value back to the medtech industry, what would be the resistance to doing that as an independent advisors or throw to you?

Zoar Engelman  33:41  
Well, well, you know, one thing that we've, we like to think of ourselves as sort of responsible founders, so we've, at least in the last few ventures, we have had the opportunity to fill independent board role, but have delayed filling that role until we brought on a CEO so that that person can identify, you know, the sort of appropriate fit for, you know, maybe what they lack or at least the kind of advice they want to get. You know, in general, I think the idea, you know, you want to bring on somebody, I think the intellectual jousting is right on, that you want somebody that you can talk to openly critically in point, you know, you have investors in your board and to a large extent, you have to manage them. And it's really difficult and you don't have the sort of open relationship frequently with the people who are putting money into we're putting their jobs on the line, and you know, as partners or principals or whatever, and they're coming into VC or whatever they are, but having an independent person is really important. Maybe the only person you can really talk to on the board.

I think for me, just having a good relationship with every board member on the board and a one on one basis really helps a lot and really just getting to know people on the board so you can have a call with them and, and discuss different topics with without the broader board. I think one of the things that's worked well that I've seen work well is board observer. ers played a role. You know, maybe it's a strategic board observer, or it's a investor that doesn't have enough shares to have a vote. But sometimes those individuals play a nice kind of equalizing role, you know, kind of managing maybe a board member that's a little harder to work with, or, you know, providing feedback behind the scenes, it helps the CEO be successful. But

Terri Burke  35:21  
it may be hard. I mean, quite honestly, there's a limited number of seats. So if you start at the early stage seed or a your boards may be five people. So you've got a common See, you've got a CEO seat, you have maybe two investors, so call it your a round. So maybe there's one seat. So that's a little bit of the problem, there aren't that many opportunities, and an investor might need to take a step back and give up a seat for the benefit of the company. And that rarely happens. So I have one that I'm an independent director on that the a round investors, the lead asked me to take it because they want an operating experience that's happened once. So it's not common. And so I think that's a little bit of the challenge of, you know, not all investors really weigh that independent seat or operating experience the same. And so that may be harder in your example for someone to find those seats

Joe Mullings  36:13  
where you can find their great CEO coach, spend the 50,000 Keep your board seat and ensure outcome of a successful

Terri Burke  36:19  
CEO. hire that person to be your right yeah.

Joe Mullings  36:23  
Well, I appreciate everybody's time here. Thank you so much for your time after lunch. And I'd like to thank my panel was well pleased