Insights

Building boards for scale: Guiding startups to success

By
Richard Rushby

Knowledge-intensive startups are engines of innovation, but many struggle to transition from promising ventures to successful scaleups. Founders emerging from research environments often lack the commercial experience necessary to navigate growth.

Early and strategic board formation is essential - beginning with advisory boards, evolving into structured governance, and ultimately preparing for the demands of a full scaleup board as significant funding is secured.

Unique challenges in academic and knowledge-intensive startups

Academic founders often face challenges when transitioning their   knowledge-intensive startups to scaleups, due to their specialized technical expertise.

Here are some key challenges:

  • Academic founders typically have deep, specialized technical expertise but may lack the commercial and operational skills necessary for scaling.
  • This technical focus can hinder strategic decision-making, particularly in forming balanced teams and engaging effectively with investors.
  • Building teams with complementary skills in finance, operations, and market strategy is essential for enabling rapid growth.
  • MedTech and DeepTech startups face challenges like long development cycles, regulatory complexities, and high capital demands, which require sophisticated governance and leadership.

The evolving role of the board in startup growth

For knowledge-intensive startups, often with unbalanced founding teams, a phased approach to board development helps bridge knowledge gaps and supports them as they transition into scaleups:

  • Advisory boards (Early stage): Provide flexible, informal guidance and industry expertise without governance complexity.
  • Structured governance (Growth stage): Introduce formal oversight as the startup begins scaling, ensuring strategic alignment and accountability.
  • Scaleup boards (Post-funding): Formalize the board structure with independent directors and specialized expertise to support rapid growth.
A woman pointing at a whiteboard while a man is listening

Key strategies for building effective boards

Establishing a board early in a knowledge-intensive venture is critical for setting the foundation for future scaling. Early-stage boards should provide strategic guidance, foster founder development, and prepare the company for growth, ensuring a smooth transition to a scaleup board when substantial funding is secured.

Effective boards are essential in guiding startups through their growth and scaling stages. Here are some key strategies for building effective boards:

  • Embed strategic thinking and governance practices from the start, ensuring a smooth transition to a formal board structure.
  • Bridge skill gaps by recruiting members with expertise in commercial strategy, operations, and market expansion to complement the technical focus of founders.
  • Evolve the board’s composition and responsibilities as the company grows, supporting the scaling trajectory.
  • Mentor founders, guiding them from hands-on roles to strategic leadership.
  • Help founders assess alternative paths, should the pace of change accelerate, and other approaches be more suitable for growth.

Case reflections

Experience from ecosystems in the Northern Netherlands, such as Innokite, highlights that successful academic startups integrate commercial expertise early by recruiting operational leaders.

They often begin with advisory boards that offer industry insights and strategic guidance before transitioning to formal governance structures. Prioritizing founder development is also essential to ensure leaders are equipped to navigate the challenges of scaling effectively.

Key takeaways

  • Proactive governance structures:
    Knowledge-intensive startups should build governance frameworks that evolve alongside their growth.
  • Phased approach:
    Start with advisory boards, transition to formal oversight, and prepare for scaleup boards to ensure long-term sustainability.
  • Alignment of strategic vision and execution:
    A phased approach aligns strategy, operations, and long-term value creation for effective scaling.
  • Empowerment of founders:
    A strong governance structure empowers founders to navigate the transition from innovation to impactful scaleups.
  • Active strategic guidance:
    Boards should not just guide but actively shape the strategic path of the startup, ensuring they are ready for scaling challenges and opportunities.