We’re Just Talking . . . With Kimberlie Cerrone


In this final installment of his series on board governance, DeNovo Ventures’ Managing Director Joe Mandato speaks with Kimberlie Cerrone, an investor, founder, and exec at nine venture-backed companies.


A few weeks ago, to cap off this board-governance series, I had the pleasure of speaking with Kimberlie Cerrone. She brings perspective to the venture-backed company table. She has been a C-level operating executive in several technology and life sciences start-ups and was co-founder and board member at a start-up that went public. She also is CEO and chairman of Tiatros Inc., which she founded in 2011, after her sons came home from military service with PTSD. Tiatros provides safe, effective psychological resilience and behavioral health programs that improve psychic and somatic health and promote personal growth and professional success.

But those aren’t the only experiences that imbue Kimberlie with perspective. She also has an MBA, a JD, a master’s degree in neuroscience, and an undergraduate biochemistry degree, as well as experience as a practicing attorney at two top Silicon Valley law firms.

Joe Mandato: Kimberlie, you are an attorney and have been general counsel. You are also a business person, entrepreneur, and founder. A person can't have a much broader perspective on governance than you do, right?


Kimberlie Cerrone: Well, I’ve made my living as a dealmaker and IP strategist repeatedly helping tiny companies get formed and organized and grow into brand name companies. I think that the development of corporate law is one of civilization's great achievements. When I join a board, I join with the idea that I have a serious role to play.

What strengths do you think you bring to a venture-backed board? In other words, describe your style and how it got to where you're willing to go out on a limb to take action.

I am respectful that other members know more than I do, certainly initially. In the go-go years of the 90s, I served on a lot of boards with venture investors who, as new investors or entrepreneurs, hadn't evolved a skillset to be effective directors. Having learned from that, I start by being quiet for a year or so. I try to understand the business. Then I get more verbal and start asking more questions. Well, actually, I ask a lot of questions from day one, to be honest with you. I ask the same question of a variety of people with different business functions until I think I understand the company. Then, when I'm ready, I try to start adding value.

Few venture investors have accomplished what they want the entrepreneur as CEO to accomplish, yet they often don't recognize their own shortcomings. To that point, are there any gaps in your board experience and skillset?

Yes, of course, I have my limitations. I wish I had a much stronger finance background, and I wish I had more experience with litigation and marketing. Oh, and having a couple of PhDs in engineering and data science would be really useful to me. That said, I'm not sure that early on a Monday morning I'm ready to analyze all my deficiencies other than to say there are plenty. The deficiencies each person has are why a board should consist of multiple people with complementary views and backgrounds.

I will say, I'm always amazed at how few boards understand the company’s customer. I can't tell you how many board meetings I've been in where what the customer needs, what the customer looks like, and what the customer wants, are not part of the ongoing discussion.

Also, in my own company, which is a healthcare technology company, I want half my board and half my management team to be women. It's very difficult to fulfill this aspiration as a technology company in Silicon Valley—almost impossible, in fact, but it’s a worthy aspiration—and I want to do it because the face of the healthcare consumer worldwide is female.

Many companies never ship their first product because the CEO and the board seemingly aren’t even aware there is a product ready to ship. This happens frequently with the engineering-centric companies we have in the venture world. The first product comes out only when the engineering team is proud of it.

That’s a powerful ambition. I’ve talked about this challenge with others. I’ve been involved with companies that are targeting female customers yet haven’t a single senior female executive. Oh, and they have a male CEO! And often, an all-male board. Wow!

Correct. It's the norm, right? The investors are male. The leadership team is predominately male. Maybe the top HR or legal executive is a woman.


Another issue that has come up repeatedly on the boards I’ve served on is the extent to which the board operates at the mercy of not just the management team but also the engineering team. I have noted over and over that many companies never ship their first product because the CEO and the board seemingly aren't even aware there is a product ready to ship. This happens frequently with the engineering-centric companies we have in the venture world. The first product comes out only when the engineering team is proud of it. I tend to learn about early products sooner because of the role I play in devising the IP strategy and securing intellectual property assets for my companies. In my opinion, many start-ups would benefit greatly if they put a nascent product into the market, started their branding, started getting customer feedback, and let the product evolve with customers’ fingerprints on it. Unfortunately, that often doesn't happen because Engineering's not proud enough of the product to release it yet. That can be an unfortunate and costly mistake.

Knowledge about the level of product readiness is a huge board-awareness gap, and that’s a risk to a company. Your general experiences with venture-backed company boards leave something to be desired, right? Could you elaborate?

Sure. Start-up boards often consist of one or two early investors, probably the CEO, and maybe the founder, who is often a technical person. These boards have to grow and mature. Going back to my enormous admiration for the sophistication of corporate law, a root problem is that many immature companies have immature leadership. That’s not a big surprise, but it should be addressed over time. They have immature boards that have little operational sense of the difference between the executive team and the board and their respective obligations and responsibilities.

Do you think the board of a venture-backed company has a role relating to culture and leadership? If so, tell me how engaged you get your directors and advisors in the company culture and the day-to-day leadership.

I believe that corporate culture mainly comes from one or two people at the top. It could be the CEO, the founder, or a board member. People on my board were C-level executives in major companies and have operational experience, deep domain knowledge, and worldwide connections. For them, money is not the most important factor. What they told me repeatedly is that they would like Tiatros to be a success. Yes, they would all like to make a great deal of money off of it, but their primary motivation is to see our product in widespread use in the marketplace, helping millions of people heal.

We all think that’s a problem worth solving, and it’s the opportunity we're all focused on. We don't talk about building wealth; we talk about getting good products into the hands of people who need them and changing their lives for the better. That’s a mission worth investing one’s time in.

To that end, our directors and advisors consistently tell me they feel I spend more time and effort giving them the background information they need to understand how to help the company. My goal is for them to want to help the company. I know that they can choose to pursue other interesting and lucrative opportunities, yet, what my advisors have said to me repeatedly is, "You know, you spend time making sure that we're current with the company and that we are actively engaged and really understand the business. You’re not just using my name; you’re engaging me. That makes it interesting and exciting."

I’m sure you've been on boards where there was at least negligence if not willful intent in keeping the board uninvolved and largely at bay, and that's not good for the company.

I have, and I agree, it’s not at all good for a company.

Many times, people have said to me, "Most companies just want me for my name. With you, I can roll up my sleeves and help build this company, and I love it." I have worked in many capacities and been involved many companies—experiences that have helped me build a great network, which is now paying off for Tiatros. We're getting customer introductions at the very highest levels, and our advisor who makes the introduction comes in with us; we work on it collaboratively. I'm not building a company alone I'm building it with senior people. The chances that we’ll be successful go way up. It’s also way more fun.

You’re clearly, powerfully collaborative. Conversely, much of the press covers companies where you've got a charismatic founder who is also the CEO, who is also a dominant shareholder, calling all the shots non-collaboratively. Tesla, Theranos, and Uber are some negative examples. What do you think about that?


I currently have all of those roles and positions. I'm the founder, chief executive officer, and chairman, and between my husband and me, we are major investors in the company. That said, I don't run the company as if I solely wield all those roles and power. I want to build a billion-dollar healthcare technology company. I cannot do that by myself. It’s impossible. I want people to want to help me, and that's what I'm working towards. I am acutely aware that the caliber of people I enjoy working with—board members, colleagues, and employees—have many options in their lives and can vote with their feet whenever they want. I’m grateful that they are choosing to spend their time working with me to fulfill the mission of building Tiatros into a special company. It’s wonderful, and I never take it for granted.

And you're willing to do a gap analysis to bring in the best and the brightest. It seems like you fill your gaps with people who have the skillsets to fill gaps as opposed to, for example, Tesla where Musk has brought in a few people who seem to me to be window dressing. You have people who you expect to hold you accountable to get things done.

Yes. You used the term gap analysis, which is how I think about it. My role in large part is to identify gaps and fill them. It turns out, I'm good at filling gaps, although I’m not always good at seeing the gaps right away. That’s why I have a cadre of people around me who not only identify gaps but also help fill them. For example, one of my advisors recently said, "We really need to build more expertise around a specific competency."

I said, "Yeah, you're absolutely right,” and then my mind went blank.

Fortunately, this person, having much more relevant experience than I, said, "I'm setting up a lunch meeting. Let's bring in my friend who I've worked with for 20 years. She has great expertise and connections. She'll help us think it through."

I’m proud of having that type of culture.

I have sat through so many board meetings where if there’s one woman, her voice gets lost, and if there are two women, the boys gang up on them. You really need three women on the board, in my experience, to change the culture of the board. ”

Let me turn to the topic of board composition. What's the right composition? You've constructed yours very consciously. Describe that process, including the diversity component, which I think is critical. You exemplify it by virtue of the fact that you're willing to hire the best and the brightest and put your ego to the side.

I’m not a fan of huge boards for the sake of huge boards. I like deeper relationships. I'm not a fan of celebrities. I'm not a fan of boards that only have financial investors, which is a common start-up board composition. The formula I’ve experienced is two young founders, two, sometimes young investors, and then me at board meetings. Sometimes it works well. Sometimes it doesn't.

I look for depth and social skills, and I look for people who are willing and able to actually spend the time. I remember in the ‘90s, I swear, [a well-known entrepreneur and investor in Silicon Valley] was on every third board in the Valley. I was practicing at Venture Law Group at the time. I never saw him come to a single board meeting, but I recall CEOs talking about how they had to hurry and get him on their board.

On your boards, you've got diversity in backgrounds, experiences, genders, etc. Did you sit down and say, "I need a diverse board, gender-wise as well as skillset-wise," or did it just happen that way?

It was very deliberate. I believe in diversity. As a general principle, it's unquestionably good. You know the data as well as I do, that diverse boards lead to more successful companies. As a woman founder and CEO, I considered it very important that at least two other women directors are on the company board. I have sat through so many board meetings where if there's one woman, her voice gets lost, and if there are two women, the boys gang up on them. You really need three women on the board, in my experience, to change the culture of the board.

So, for me, that effort was very deliberate. I also believe that my customers are people of all economic and social backgrounds, different needs, and I need both my executive team and my board to look like my customer.

That’s very good. Is there one board in particular that in your experience stands out as being especially good?


A board I have observed from a distance and come to admire is the Salesforce board. They're serious people. They've been building a great company for many years, and a few of them have been around since the beginning. It appears to be a very active and cohesive board that knows the business well. They’re serious about diversity. They take culture seriously. I've seen many boards where people come in and, because they were early at Intel or Cisco, are considered legendary investors. But every company is different. I think that type of board experience is awesome when it’s tied to actual knowledge about a company's particular challenges. That's what makes a board worth its salt. The Salesforce board has that. I have evolved my thinking a lot by plain-old copying what Marc Benioff has done.

As for bad boards, years ago I had an inside view of a venture-backed company board that had legendary and genuinely accomplished investors, but at the end of the day, they only knew what the CEO told them. Meanwhile, the CEO management style was such that whoever he talked to last had the biggest influence on him. I saw him as a raft floating in a sea of advice and information. I saw that company drift around with no clear forward direction for years. It was a financial success in that it went public, but it never got a good product to market. It’s no longer an operating company.

My observation is that people sometimes get territorial and hoard information in ways that are counterproductive.

You were involved early on with Yahoo. It’s interesting that you had that vantage point, because for a time Yahoo was a classic example of a dysfunctional board.

I watched it for over 20 years. By the time they were selling the company, some awfully good people sat on that board, and I want to be careful to note that. But I saw for a period of ten years before that talented people leaving the company, voting with their feet because, basically, the executive team and board couldn't lead it effectively. It was a shame.

I understand you aren’t calling out specific directors as dysfunctional; it’s sometimes the dysfunction of the board as an organizational structure and culture within the company overall, not the failure of one individual. How do you feel about people that hold both the CEO and board chair title in general?

Addressing my own ambitions for Tiatros, my goal is as quickly as possible to get out of one role or the other, to either be the chairman of the board and do that job, or be the CEO and do that job. I'd rather do one job well.

In general, would you say you believe that the separation of the two is more effective?

I think so. It's now on me to make a good decision about the chairman of the company. I don't want to bring on someone who is an investor with ten boards to manage and doesn't know my business day-to-day. I know I can do better than that, because my company's really cool, and it’s worth more than that. We are on a successful path, and we solve arguably one of the biggest problems in the world. If we do it right, we'll be able to attract top talent who passionately want to solve this problem. That in turn elevates the chance that we'll become more successful.

On the topic of growth and success, you’ve been through IPOs. When you evolve from the start-up phase to the IPO phase, do the board dynamics change? Does the leadership explicitly change the composition of the board in anticipation of the IPO?

Yes. I'm going through this now as a matter of fact. We recently reached a pivot point where we not only have a few products in the market, but also we're getting fantastic results in terms of clinical outcomes and usage data. We’re attracting the attention of best-of-breed business partners. We're gaining customer traction. The goal is not for me to be comfortable with the board and to feel ‘safe’; it's for the board to push my team and me forward. A great board is a great asset to a company. It’s also a lot of work for the CEO.

Regarding your own personal development as a board director, did you have a mentor who helped you get where you are and taught you how to be a great board member or senior executive?


I’ve had a lot of mentors in my career. You may remember Craig Johnson, a legendary Silicon Valley attorney. Craig and I would go to board meetings together, and he would tell me what to look for so I would see it. After meetings, he would debrief me on what additional dynamics were going on. Being a technology attorney at two of the premier law firms in Silicon Valley after my first company went public gave me the chance to go to many board meetings, and the experience to see what was happening. I repeatedly saw things that worked and things that didn't work.

Repetition is great. It sounds like he gave you good advice. Can you recall any of the specific advice he or others gave you on how to be a great board member?

Craig was very generous with sharing his wisdom with many people. I often remember him emphasizing the importance of giving actionable advice. It’s pointless to tell someone to do something if she has no practical idea on how to execute on the advice. I also distinctly remember us driving back to the office one afternoon after leaving a start-up board meeting and Craig talking about the importance of entrepreneurs working to solve problems that really matter to them. I wish he were here to help me with Tiatros. Cynthia Ringo [of DBL Partners] is another terrific friend and wonderfully skilled mentor to me. She’s been a CEO and an extremely successful investor, and she has made herself remarkably available to me over the last few years. I appreciate that she chooses to spend her precious time helping me achieve my life’s mission.

One of the things she told me, which I have seen often in other people’s companies, was "Boards always wait six months to a year too long to swap out somebody at the top role. There's never a good time to make some changes, but things won’t get better with time. Get it done.”

That’s a big-ticket piece of advice I try to remember.

Venture boards have never fired a CEO too early. Can you recommend any useful sources for a new board member to learn more about board practices, cultures, and meetings?

I would like to ask you that question, Joe! I think you would know better than me. But, meantime, I’d like to suggest that there are a lot of bad resources. Just last week, I told the CEO of a start-up company that she's receiving bad advice. It was obviously bad advice–not a tough call on my part at all. She literally did not understand that she needed to evaluate the advice she was receiving and its actual relevance to her company’s situation. Unfortunately, there's an ocean of bad advice out there. Being able to distinguish between good, actionable advice and somebody's opinion—that's a skillset. I'm getting better at it, and I have terrific people in place to help me.

If you could offer one piece of advice to a founder-CEO who's a board member or chair of a high-growth company that has other people's money, what would it be?

You can do anything you want PROVIDED that you can only do what you can pay for! That’s Kimberlie's first law of entrepreneurship.

Ultimately, the CEO is the only one accountable. The venture investors—they spend this, they spend that, but at the end of the day, as CEO, you're the only one accountable.

Exactly! One of my early investors told me a few days ago, "In about two years, Kimberlie, you're going to be an overnight success." Entrepreneurship is very humbling. You have to have a tolerance for risk, loneliness and ambiguity.

That's right. Kimberlie, this has been very special. I really appreciate your time. What comes out clearly is that you bring a deeply human component to what you do and how you think about business. Having been a Captain in the Army Medical Service Corps, I have some appreciation for what you're doing and why you're doing it—thank you!

That's wonderful to hear. Thank you, Joe!

As mentioned, Kimberlie has been on the executive team of nine venture-backed companies. In two of those─Neurobiological Technologies Inc. and Net Perceptions)─she had involvement from start-up to IPO. She has also served on several corporate and non-profit boards.

You can hear a brief clip of our conversation here.

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Executive Interviews

We’re Just Talking . . . With Kimberlie Cerrone

In this final installment of his series on board governance, DeNovo Ventures’ Managing Director Joe Mandato speaks with Kimberlie Cerrone, an investor, founder, and exec at nine venture-backed companies.

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