Venture Capital Boards – Driving Change Across the Built Environment: An interview with Mauricio Weiss
Welcome to the second instalment of our venture capital boards (VC) interview series, where we speak with a host of investment leaders from across the world of VC funds that back businesses across the global built environment technology space.
Venture capital funds take a more active role in their investments by providing guidance and often holding a board seat. VC funds, therefore, play a hands-on role in the management and operations of the companies in their portfolio. The objective of this series is to better understand the makeup of the VC board or advisory panel, and the role it plays in both the growth of the VC fund itself and the fund’s portfolio companies. We’ll also be exploring the importance of diverse representation across a board and how larger corporations can take guidance from VC funds when exploring their own internal structure.
About Mauricio
Mauricio is one of three Founding Partners at Zacua Ventures, a venture capital fund that invests in the next generation of built environment entrepreneurs. He works closely with entrepreneurs to help them succeed, achieve high ESG standards and drive the industry forward to respond to the climate and productivity challenges.
In your opinion, what are the key requirements of venture capital board or advisory panel for those early-stage businesses?
The board composition should be lean in order to provide the right advice for these startups so they can easily understand the market, how they’re translating this into product development, addressing the customer market and how to go to market. The board should be a sounding board, providing advice and guidance on what the action points should be moving forwards At the early stages, the board should be agile and eager to get involved in the company and guide the entrepreneur. I would recommend no more than 3 members at the early stages and that they should support the business in a responsive way more than anything else.
At Zacua, the way we engage with start-ups, from an advisory level, is driven primarily by the age and size of the business. At the early pre-seed stage, most businesses will assemble an informal panel of advisors. It is after Series A that we start formalising the board.
What should the make-up of an early-stage board look like in terms of a diversity, background, and experience perspective?
Ideally, one of those three members should be the founder or CEO, the other two are most likely to come in from investors. We often find that someone with technical or market expertise makes an incredibly valuable board member, that way they can provide solid advice on workflow, customer understanding and the product itself.
As VCs raise more with each round, does the role of the board change?
Once a business is beyond that series A round, then it’s all about growth and efficiency. Now that you’ve found the market strategy that works for you, the focus should be to reduce friction in that strategy and develop it as you grow. Alongside this, it’s important to think about the next step of growth, such as launching in a new region, expanding into a different industry, or developing a new product. From a team perspective it’s good to start thinking about the core values of the company and developing the culture. The board starts taking more structure and supports the entrepreneur on developing the team, defining the best compensation scheme, and a HR department. Their role shifts from an advisory position to approving the items brought up by the founder. This allows the founder to focus on their area of expertise and give the board more control.
What can VC boards learn from larger corporates? And vice versa?
Simple things, such as preparing an agenda and materials for a board meeting ahead of the event to keep the meetings focused and streamlined. I think that’s a key learning for start-ups, as I have attended many meetings that are quite ad hoc and based around the discussions of new ideas, rather than focussing on the key issues at hand.
Although, what I do like about start-up culture is the continuous focus on the end goal and how the actions and plans are aligned with the long-term mission of the company. Typically, larger corporations are looking at it year to year results, so that’s something these larger companies can learn from VC boards.
What role would you say the VC board or advisory panel play in driving industry change – from a governance, ESG perspective?
One thing that will drive successful strategies in the long run is Environment, Social & Governance (ESG)-related policies. We believe that by placing ESG KPI metrics at the core of a business early in its development, it will put organisations in a much better position in relation to how it is viewed by future customers and make it a more attractive market offering. At Zacua Ventures, we set a timeline for entrepreneurs to define ESG KPIs and how they will be measured alongside other performance metrics. Internal policies should also reflect wider commitments to ESG.
What’s your focus, 12-18-24 months? As your investments grow, what’s your focus as an advisory?
Being part of different boards, you learn a lot from going to meetings because of the variety of perspectives you encounter. Since we are international investors, we look to these board meetings to help us understand different perspectives from around the world how different organisations, in different regions see the market. Our focus for the future is to continue to understand how the market will react to the change in interest rates, how this will affect the industry and what key measures early start-ups need to put in practice to be more attractive to investors and future clients. Another focus for is to understand how leading regions are reacting to ESG concerns, inflation, and labour shortages so we can provide sound advice to other start-ups.
If you would like to discuss any of the topics raised in this piece or if you need support with your leadership resourcing strategy, please get in touch with George Dobbins: george.dobbins@beaumontbailey.com
