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By Bradley L. Gerstman, co-founder of Gotham Government Relations and Gerstman Schwartz LLP.
In its most distilled form, a board of directors is described as “a group of people who manage or direct a business or organization.” For both for-profit and non-profit institutions, the existence of such a structure helps ensure that all facets of a brand are focused on success. This includes everything from financial and legal expertise to fundraising and industry skills. With a strong board of directors, a CEO has immediate access to experts with a vested (often financial) interest in their vision.
Likewise, advisory boards, which tend to be more informal in nature, are also designed to guide companies. While this type of executive committee is not usually legally tied to a company, it plays an important role in paving the way to success. Consultants can be brought in for a variety of reasons, such as to fill a knowledge gap, support a new project, or act as a sounding board for CEOs.
Like all companies, technology companies and startups need fundamental board members. These individuals are usually high-level accountants, strong general counsel (in addition to legal counsel the firm employs), and operators (those who have successfully established a business in the past). Each of these experts plays a vital role in guiding a new or growing business. Interestingly, however, when it comes to emerging companies, there is one potential board member who, to the unrealized detriment of the tech world, continues to be overlooked.
It may surprise you, but for technology companies and startups, one of the most essential advisors to have on your team is a government relations specialist. This is why:
In addition to teaching companies how to scale their growth and connect within the necessary networks, boards must give companies the opportunity to open doors. As individuals who base their entire career on understanding the logistics of government agencies and interests, lobbyists know better than anyone how to do it. From fundraising to relationship building, a great lobbyist has reach that can change a company’s trajectory. But that’s not all: in addition to their networking talents, lobbyists are also fluent in government processes. That is, they have the skills to not only recognize potential obstacles as they relate to regulations and policies, but also to navigate them.
Regulators, whether in the form of an individual office or governing body, are appointed to oversee an industry. This can be particularly challenging for those working with emerging technology, as innovations do not always fit into existing management models. As a result, regulators may unfairly try to limit what a company can or cannot do. However, with a government relations specialist in your corner, that can be much harder to achieve. In fact, policy experts are trained not only to understand government structure, but also to identify areas of interest and opportunities.
Unlike regulators, legislators are elected by the community. It is their duty to support the needs and interests of their base, otherwise they are unlikely to be re-elected. So, as you can imagine, creating connections with community members and representatives is a necessary step that emerging technology companies can take to level the playing field. It’s true what they say: government can, and often will, slow down business. However, if a government member believes in your view, they can also help minimize roadblocks by voting to change existing or outdated laws. In these situations, a board member who can make necessary introductions and/or speak on behalf of a company is critical.
If the opportunity arises, a lobbyist can advise on applications, even if the government becomes the buyer. Rapid access to and established relationships with decision-makers, regulators, powerful community members and legislators is key to driving meaningful government sales opportunities. Take edtech for example. In an industry like this, where government plays an integral role in the conversation, a sale can be a complete game changer for both the emerging industry and those who operate in it.
It should come as no surprise that a fundamental goal of any business is to become and remain profitable. By arming founders with the knowledge needed to avoid regulatory hurdles and understand industrial policy, government relations specialists quickly add value to technology companies. CEOs who can respond quickly to questions about these areas immediately increase both the valuation of their company and the confidence that investors place in them. This, in turn, narrows the list of potential risks associated with their vision and increases the likelihood of future sales. Having access to key decision-makers and government officials just streamlines that process.
So what do you think? Is it finally time to bring government relations experts to the table? I would say it.
Brad Gerstman is a leading New York State attorney, lobbyist and communications specialist. He is also a co-founder of Gotham Government Relations and Gerstman Schwartz LLP.
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This post Emerging Technology and the Overlooked Board Member was original published at “https://venturebeat.com/2022/03/20/emerging-tech-and-the-overlooked-board-member/”