Ryan Caldbeck, a co-founder and the former Chief Executive Officer of the investment platform CircleUp specializing in consumer brands, recently shared an email he had sent to a previous member of the company’s board of directors.

Caldbeck explains he composed the letter following CircleUp’s acquisition of the investor’s firm, intending to offer constructive criticism, as this individual’s “participation presented significant challenges for CircleUp and our board,” as he communicated to them, while maintaining their anonymity.

This situation sparked inquiries regarding internal dynamics within startups, particularly concerning the composition of their boards. However, some seasoned industry professionals suggest Caldbeck’s experience might be less common than one might think, offering practical guidance on avoiding problematic board members and managing them when avoidance isn’t possible.

Joel Peterson, a professor at Stanford’s Graduate School of Business, former chairman of JetBlue Airways, and founding partner of Peterson Partners – a Salt Lake City firm investing in startups and venture funds – emphasizes the importance of thoroughly vetting potential board members. He states that selecting a director for your company can be a “critical decision” with far-reaching consequences, both positive and negative.

Peterson advises “assessing investors with the same scrutiny they apply to you,” evaluating not only their knowledge and alignment with your values but also their available time commitment to your company. He believes angel investors are “frequently more effective board members than venture capitalists,” as they often demonstrate a stronger dedication to the entrepreneur and maintain a more involved role in the business’s development.

Peterson further suggests being cautious of venture capitalists known for aggressively pushing for rapid hiring. While some companies are suited for rapid scaling, he notes that “many VCs lack patience” and, in their pursuit of “10x to 100x returns,” tend to “eliminate companies that aren’t showing sufficient progress.”

There are additional strategies to reduce the likelihood of experiencing a detrimental board member relationship like the one Caldbeck appears to have faced. Jon Holman, a veteran venture recruiter, highlights the value of collaborating with individuals who have prior experience serving on startup boards.

This may seem self-evident, yet it’s often overlooked, especially considering the influx of new participants into the venture investing landscape over the past five to ten years during a period of economic growth. (Caldbeck himself acknowledges in the same letter that the recipient of his message was relatively inexperienced in professional investing when they initially connected.)

Holman clarifies that lacking prior board experience “doesn’t necessarily indicate a lack of intelligence.” He concedes that the individual “might be exceptionally bright,” but warns that their understanding of company building, fundraising, and management approaches “could be nonexistent,” and that “those with the least confidence sometimes express their opinions most forcefully.”

Holman also points out a common mistake founders make: accepting the largest investment offer without sufficient consideration of the investor’s suitability. “Those offering the highest valuations often struggle to secure the most promising deals – and there’s usually a reason for that,” he observes. Instead, prioritize finding someone who will contribute valuable insights to the board, particularly in areas where your existing directors lack expertise.

Implementing these measures can be challenging, particularly when options are limited. Furthermore, identifying a difficult personality isn’t always straightforward. What course of action should you take if, despite your best efforts, you find yourself with a problematic director?

Holman suggests addressing the issue directly – with another board member. While a CEO might prefer to handle the situation privately, this approach can create an awkward dynamic that’s difficult to resolve if the conversation doesn’t go as planned.

Seeking feedback from a trusted colleague can be a more effective strategy, Holman says. “If a [more experienced director] can state, ‘Multiple people have observed this behavior in you, and I’m presenting this as an objective observation,’ the individual [receiving the feedback] is often genuinely appreciative.” (Caldbeck, in his letter, encourages the investor to “seek out mentors who can provide honest feedback.”)

This approach may not yield immediate results. In some cases, as with Caldbeck, more drastic steps may be necessary. However, even then, you might be benefiting future founders who consider partnering with this individual. Holman concludes: “It’s surprising how often people are unaware of how they are perceived.”