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By Bradley L. Gerstman, cofounder 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 company or organization.” For both for-profit and non-profit institutions, the existence of such a structure helps to ensure that all facets of a brand are geared toward success. This includes everything from finance and legal expertise to fundraising and industry-related skills. When a strong board of directors is in place, a CEO has an immediate line of access to experts with a vested (often financial) interest in their vision.
Similarly, advisory boards, which are typically more informal in nature, are also designed to mentor businesses. While this type of executive committee is not usually legally bound to a company, it does still play an important role in paving a path to success. Advisors can be brought on for several reasons, including to fill a gap in knowledge, support a new project, or act as a sounding board for CEOs.
Like all other businesses, tech companies and startups need foundational board members. These individuals usually include high-level auditors, strong general counsel (in addition to whatever legal counsel the company has on retainer) and operators (those who have successfully brought up companies in the past). Each of these experts plays a pivotal role in helping to guide a new or growing company. Interestingly, however, when it comes to emerging businesses, there is one potential board member that, to the unrealized detriment of the tech world, continues to be overlooked.
It might surprise you, but for technology companies and startups, one of the most essential advisors you can have on your team is a government relations specialist. Here’s why:
Beyond teaching businesses how to scale their growth and connect within necessary networks, boards need to provide companies with the ability to open doors. As individuals who base their entire careers around understanding the logistics of government agencies and interests, lobbyists know better than anyone how to do that. From fundraising to relationship building, a great lobbyist has a reach that can transform the trajectory of a business. However, that’s not all: outside their networking talents, lobbyists are also fluent in government processes. That is, they have the skills to not only recognize potential obstacles as they pertain to regulations and policies, but also how to navigate them.
Regulators, whether in the form of an individual position or governing body, are appointed to oversee an industry. For those operating within emerging technology, this can be especially challenging, given that innovations cannot always fit into existing models of management. As a result, regulators may unfairly seek to limit what a company can or cannot do. With a government relations specialist in your corner, however, that can be far more difficult to accomplish. In fact, policy experts are trained to not only understand government structure, but also identify areas of interest and opportunity.
Unlike regulators, legislators are elected by the community. It is their duty to support the needs and interests of their base, or else they likely won’t be reelected. So, as you can imagine, creating connections with community members and representatives is a necessary step emerging tech companies can take to level the playing field. It’s true what they say — the government can, and often will, slow down business. However, if a member of the government believes in your vision, they can also help to 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 a company’s behalf is critical.
Should the chance present itself, a lobbyist can advise on applications, even those in which the government may become the purchaser. Having fast access and established relationships with decision makers, regulators, powerful community members, and legislators is the key to pushing forward meaningful government sales opportunities. Take edtech, for example. In a sector like this, where the government plays an integral role in the conversation, a sale can be a complete game-changer for both the emerging industry and those operating within it.
It will come as no surprise that a foundational goal of every business is to become and remain profitable. By arming founders with the knowledge needed to prevent regulatory obstacles and understand industry policies, government relations specialists offer quick added value to technology companies. CEOs who can readily respond to questions pertaining to these areas immediately increase both the valuation of their business and the faith investors have in them. In turn, this decreases the list of potential risks associated with their vision and amplifies the likelihood of future sales. Having access to key decision makers and government officials only streamlines that process.
So, what do you think? Is it finally time to give government relations experts a seat at the table? I’d say so.
Brad Gerstman is a leading New York State attorney, lobbyist, and communications specialist. He is also a cofounder of Gotham Government Relations and Gerstman Schwartz LLP.