SOURCE: Levensohn Venture Partners

January 30, 2007 09:00 ET

Western Association of Venture Capitalists Endorses New White Paper Addressing Critical Role of Corporate Governance for VC-Backed Company Directors

Paper Represents First-Time Collaboration of 22 Venture Capitalists, CEOs and Industry Thought-Leaders; "A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors" Also Endorsed by Israel Venture Association and the Women's Technology Cluster

SAN FRANCISCO, CA -- (MARKET WIRE) -- January 30, 2007 --The Western Association of Venture Capitalists (WAVC), a venture capital organization with 130 venture firm members and more than 800 venture capitalists, today endorsed the release of a new white paper on corporate governance entitled, "A Simple Guide to the Basic Responsibilities of VC-Backed Company Directors." A working group of 22 venture capitalists, technology CEOs, and industry leaders collaborated on the paper. It is the first time in the history of the technology industry that this significant number of individuals collectively worked as a group to create a white paper on a topic of such importance.

In addition to WAVC, the white paper was also endorsed by industry and entrepreneur groups including the Israel Venture Association and the Women's Technology Cluster.

"The issue of corporate governance is top of mind within the venture community," said Sonja Hoel-Perkins, president of the WAVC board and managing director of Menlo Ventures. "We believe this white paper provides useful and important direction to WAVC members and enables them to add even greater value to their portfolio companies as board members."

Professor Jay W. Lorsch of the Harvard Business School noted that, "VC-backed boards face problems that are different from other types of company boards. These boards should adopt the guidelines described in this paper."

According to Dr. Orna Berry, Chairperson of the Israel Venture Association (IVA), "The issues of effective board governance are of particular interest to VCs in Israel, where the VC industry is younger and therefore the challenges are newer. The IVA intends to make board composition a priority in our soon-to-be-launched VC education program."

Jennifer McFarlane, CEO of the Women's Technology Cluster, the business incubator that has worked with 140 women entrepreneurs, observed that, "First time CEOs face not only the challenges of building new companies but also working effectively with external boards in the absence of benchmarks for accountability. This guide provides a clear, concise direction on their new role as well as those of their fellow Board members that should help improve the value and effectiveness of the Board to their company."

"Many people who join VC-backed boards are not experienced directors. The frequency with which this occurs is a unique challenge for the venture capital industry, and the thoughts from this working group address how to handle inexperience on a board," said Pascal Levensohn, Chairman of the Working Group and Founder and Managing Director of Levensohn Venture Partners.

The working group consists of 22 individuals from renowned venture capital firms, law firms, leading technology companies and a venture education association. The group is chaired by Pascal Levensohn, Founder and Managing Director of Levensohn Venture Partners. The venture capitalists who co-authored the guide include Andy Rappaport of August Capital; Randy Hawks of Claremont Creek Ventures; David Spreng of Crescendo Ventures; Bill Elmore of Foundation Capital; Tom Furlong of Granite Ventures; Juliet Flint of Kleiner Perkins Caulfield & Byers; Janice Roberts of Mayfield Fund; Rex Golding of Mobius Venture Capital; Promod Haque of Norwest Venture Partners; Amanda Reed of Palomar Ventures; Aaron Mankovski of Pitango Venture Capital; Greg Sands of Sutter Hill Ventures; and Chris Rust of U.S. Venture Partners. Bob L. Corey, an independent director of Veraz Networks, Interwoven, and Extreme Networks, Brooks Stough, attorney and partner at Gunderson Dettmer Stough Villeneuve Franklin & Hachigian, and Steve Bochner, attorney and partner at Wilson Sonsini Goodrich & Rosati, also belong to the Working Group. Two Silicon Valley CEOs are part of the Group: Joy Weiss of Dust Networks and Doug Sabella of Veraz Networks. Patrick Von Bargen, CEO of the Center for Venture Education, is the twenty-second member of the group.

Dow Jones VentureOne will feature five members of the working group in a webcast called "Improving Director Performance: Practical Governance Recommendations for Private Company Boards." The webcast will occur on February 2, 2007 at 12-1:30pm EST. For more information, contact Dave Barry at Dow Jones VentureOne at david.barry@dowjones.com.

Focus on Establishing Standards in Board Education by the Working Group

The 20-page white paper consists of three modules. Module I explains the board's role and the minimum business and legal expectations of board service. It also describes the common characteristics of effective private company boards as well as the characteristics of ineffective private company boards. Module II presents a brief self-evaluation which consists of a list of questions each director should ask him or herself annually. The Working Group believes that self evaluation should be a formal agenda item to be formally considered by each director. Module III consists of an innovative application of a widely recognized public company best practice to VC-backed companies, the annual board peer review.

The paper is available at http://www.levp.com/news/whitepapers.shtml as well as through the WAVC (www.wavc.net) and the IVA (www.iva.co.il). For more information, contact Pascal Levensohn, Chairman of the Working Group, Founder and Managing Director of Levensohn Venture Partners (pascal@levp.com).

Contact Information

  • For more information contact:
    Pascal Levensohn
    Levensohn Venture Partners
    415-217-4717
    Or
    Jennifer Jones
    Jennifer Jones Consulting
    650-529-1416