Here's how some Twin Cities med-tech CEOs find people for their board of directors

Chief executive officers grab all the attention inside a company and most of the headlines outside it.

But a strong CEO needs the backing and support of a solid board of directors. When a company is just getting started, finding the right people for a board is a huge challenge. Posting a note on Twitter won't solve it.

Experienced company founders and chief executives say that two key factors are knowing where the company is in its growth cycle and knowing what the company is missing in terms of experience and expertise.

Bob Paulson, a well-known leader in the Twin Cities med-tech community, says there are a number of variables that come into play.

"It's more art than science," Paulson said. "It depends on where the company is, it depends on the experience of the founders, what stage the company's at, and what are the complementary skill sets you're looking to put on the board for what purpose."

He joined Eagan-based Sonex Health Inc. as its CEO in November, his fourth time to lead a local medical startup. He's best known for his time at the helm of Maple Grove-based NxThera, which sold to Boston Scientific in 2018 for $306 million.

Before starting the hunt for a board member, Paulson said that a CEO needs to know: "Here are my gaps; here's what I don't know."

Board members might add industry-specific experience, access to new networks or connections to potential investors. If a fledgling company can't afford to hire a chief medical officer, it might make sense to recruit a physician for the board.

Inexperienced company leaders may want to tap into management veterans who can effectively serve as a mentor to the CEO, Paulson said.

In his industry, Paulson said that there are three distinct phases for new companies. What a company needs for its board will depend on where it falls along that continuum.

"If you're in the med-tech world there's the R&D phase, the clinical stage and then the commercial phase," said Paulson. Sonex is now in the third stage.

Sonex, which was started by two Mayo Clinic doctors, makes the UltraGlideCTR that allows doctors to perform a minimally invasive treatment for carpal tunnel syndrome.

"For me, how do you find anybody good always goes back to your network," said Horton.

But Horton noted that the depth of your network will reflect your own experience. There are search firms that can help companies find board members, but that will cost money — something many startups can't spare.

"A lot of your startups … they're not going to have the same network [as] somebody like me who's been in the industry for 30 years," Horton said.

She said that it's important to keep the big picture in mind with a clear understanding of the board's role.

"Your board's job isn't day to day," said Horton. "You want to pick a board that has a spirit of generosity, that has motivations that align with what you're trying to achieve. You really want board members that are engaged, that are wanting the best for the organization."

Sonex has a five-member board, which includes a seat for Paulson. Three of the other directors have extensive med-tech industry experience. The fourth is a representative of San Francisco-based KCK Medical Technologies, which invested $20 million in Sonex earlier this year.

"If you bring in institutional money, then they're probably almost always going to insist on having at least a seat on the board," Paulson said.

He added that it's also important to have a group of people who can work together.

"Culture in the board room is a big deal. … You also need to have personalities that mesh. I would say trust and communication are key," said Paulson. "As a CEO you have to understand that dynamic."

"You can't underestimate a good board," Horton said.