Jack Altman says founding a company taught him a big lesson about picking the right board

Business Insider

2 days ago

Jack Altman has a lesson for early-stage founders: Pick the right board.
On an episode of the "Sourcery" podcast published on Saturday, Altman, a founder-turned-venture capitalist, said that if he were to launch a startup again, he would focus on bringing on the right board members.
"You're really picking somebody who's going to be with you as a throughline through the company," he said. "It's hard to see it when it happens because you're just in a frenzied round."
Altman founded and led Lattice, a human-resources software startup last valued at $3 billion, for over eight years before stepping down as its CEO last year.
He has since launched Alt Capital, an early-stage venture firm that has invested in AI and nuclear energy companies. In February 2024, the firm raised a $150 million fund to invest in seed and Series A startups. Alt Capital did not respond to a request for comment from Business Insider.
On the podcast, Altman said that picking good board members is crucial because founders end up making "high-stakes" decisions together.
"It turns out that what you're picking is somebody who's going to be there with you longer than most of your employees," he said. "You're going to talk to them about stuff that you're not going to talk to your employees about because you can't."
Altman added that picking investors you like doesn't matter as much in the seed stage, but it becomes important once companies create boards of directors. According to PitchBook, he is on the boards of two startups: WorkRamp and Verifiable.
Getting board composition right is a heavily discussed topic in Silicon Valley. Investors often find themselves being rated on " founder friendliness" — an approach that prioritizes the founder's vision and expertise.
Meta's CEO, Mark Zuckerberg, has said a lack of technical chops in board leadership was one of the first things he noticed when he went to Silicon Valley, and it was among the things he wanted to do differently at Meta.
"The CEO wasn't technical, the board of directors had no one technical on it, they had like one dude on the management team who was the head of engineering who was technical," he said of his early observations, in an interview last year. "Alright, if that's your team, then you're not a technology company."
He added that he was careful about having an engineering and management balance on the board because it affects company culture and how it weighs decisions.
The Altman brothers are intimately familiar with what can happen when founders and board members disagree.
Sam Altman, the CEO of OpenAI and Jack Altman's older brother, has been vocal about problems he had with the ChatGPT maker's board.
Earlier this year, the OpenAI chief said that the company's board left him with a "complete mess on my hands" after he was reinstated as CEO after a brief ousting in 2023.