Tollgrade’s Private and Public Company Boards: A Founder’s Perspective

Every tech startup needs a strong Board of Directors. In my experience at Tollgrade Communications, the role of the board changed dramatically as we transitioned from a scrappy private startup to a publicly traded company. Looking back, I am most grateful for the board that guided us through our earliest and most fragile days—because without them, there would have been no IPO to celebrate.

Angels in Erie

The concept of an “angel investor” traces back to Broadway in the early 20th century, when wealthy patrons—“angels”—funded risky productions in exchange for a share of profits if a show succeeded. Harry Frazee, infamous for selling Babe Ruth to finance his play No, No, Nanette, stands as one of the most notorious. The term later evolved to describe wealthy individuals who fund startups, bridging the gap between family money and institutional venture capital.

 At Tollgrade, our angels were not Wall Street financiers. They were cardiologists from Erie, Pennsylvania—my father’s doctors. Brilliant, board-certified professionals, they studied our technology until they understood it better than most telecom executives. They invested heavily, not just financially but intellectually. And they had “skin in the game.”

 “Chris, how can we help you?”I never left a board meeting without hearing: 

Their involvement was personal and logical. They weren’t looking for quick exits or fancy financial engineering. They wanted the company to survive and thrive.

 A Snowy Night, a Near-Death, and a Miracle

The most vivid memory of our private board came during a snowy February night in 1992. Tollgrade was on life support. Our ELPA and OIU products had drained cash, and predatory venture firms were circling, hoping to force down our stock price. We needed a miracle.

“The Docs,” as my dad called them, delivered. Led by our founding investor, Dr. Rich Heibel, along with partners Tom Dugan, Gordon Anderson, and Jeff Blake, they infused cash when no one else would. Rich himself battled polycystic kidney disease and the need for a transplant, yet he never wavered. He wrote checks, guaranteed loans, and offered steady guidance.

Three months later, Tollgrade turned a profit. Three years later, we went public at $14 per share. By December 1995, the value of The Docs’ holdings exceeded their wildest expectations. Many held their shares for years, some until 2000 when our stock hit $300 (pre-split), giving us a $2 billion market capitalization.

They deserved every cent. They literally saved the company.

Skin in the Game

The Docs’ investment was more than capital—it created alignment. At IPO, the board owned 57% of Tollgrade. Their financial stake ensured they were deeply invested in governance, strategy, and accountability. They weren’t professional venture capitalists; they were doctors, a real estate entrepreneur, telecom engineers, and a financial executive. They made decisions on logic and survival, not leverage and optics.

This alignment between management and board fostered trust. They believed in my father’s track record as an entrepreneur and in our vision. Their guidance, mentorship, and networks allowed us to run not just the sprint of survival, but the marathon of growth.

The Public Company Board

Everything changed as we prepared to go public. Our bankers advised that the offering would be stronger if we reconstituted the board with more corporate experience. Most of our angels agreed to step off—liberating them to sell stock more freely.

The new board included the late Dan Barry (former CFO/CEO of AMASCO), the late Bob Kampmeinert (CEO of Parker Hunter, our underwriting bank), Dave Egan (a colleague from my Ketchum PR days), and James Barnes (our securities attorney). Dr. Heibel remained to represent The Docs.

The difference was stark. A private company board works closely with management, focusing on survival, growth, and strategy with a handful of engaged shareholders. A public company board, however, shoulders broader fiduciary duties. They oversee compliance, transparency, and risk management for thousands of shareholders under SEC scrutiny.

As I reminded my father on IPO day: “We’re employees now.” When TLGD hit the NASDAQ ticker, we no longer worked for ourselves—we worked for the shareholders.

Governance and Burnout

From 1995 to 2006, our public board did its job well. We navigated market growth, regulatory changes, and the heavy lift of Sarbanes-Oxley after the Enron scandal. The new requirements demanded extensive auditing and governance work, but they strengthened our credibility with investors.

Perhaps most importantly, the board recognized something I did not: burnout. After 10 years as CEO, I was exhausted. The board helped me see it was time to transition leadership. Our COO, Mark Peterson, was better suited for the company’s next phase, as Tollgrade evolved from a plug-in vendor to a systems provider.

Mark had the engineering background and big-company training from AT&T (later Lucent Technologies) to lead the next chapter. Handing him the captain’s chair was the right move—for the company and for my health.

Harvard research supports this pattern: the average CEO tenure in S&P 500 companies is about 7 years, with median tenure closer to 5. Leadership turnover reflects not only personal capacity but also the need for fresh skills as companies evolve.

Lessons Learned

Looking back, Tollgrade’s two boards represent different but equally vital stages of growth.

• The Private Board was about survival, belief, and alignment. The Docs risked their own money, guided us with logic, and literally saved the company. Their investment created trust and urgency.
• The Public Board was about governance, compliance, and stewardship of shareholder value. They managed risk, ensured transparency, and recognized when leadership needed to change.

Both boards mattered. But without the angels in Erie, there would have been no Tollgrade IPO, no $2 billion market cap, and no story to tell.

Conclusion

Every startup founder dreams of ringing the bell on Wall Street. But that moment is impossible without a board that first keeps the lights on, believes in the vision, and has skin in the game. At Tollgrade, our cardiologist angels gave us the heart to survive. Later, our public board gave us the governance to thrive.

“How can we help you?”A founder’s greatest fortune is not just raising capital, but finding board members who ask, again and again: 

Chris Allison, Co-Founder and CEO of Tollgrade Communications, Inc., teaches business at Allegheny College in Meadville, PA and is the author of the new book, Hit It!: A Tech Startup Story and Seven Rules For Entrepreneurs.