Advantages of Business Advisors:
a) easy to Create & Expand, b) Free or low $$$, c) not Liable to Company & Shareholders & d) only obligated to Founder/s & Management Team.
For > Info on: “Advantages of a Board of Advisors vs. Board of Directors” go to eMinutes Blog for Attorneys
Advisors Topics: What you Want, What your Startup needs, Diverse, Network, Failures, Qualifying, Informal, Time, Priority, former Competitors?
As a growing startup, it’s wise to accept help & advice from Advisors who have successfully launched their own Startup. One way to surround yourself with these experts is to create a formal Advisory Board for your Startup. But there are a lot of considerations to make before you select your Advisors. Then there’s the challenge of convincing them to make the commitment to you. So, what’s the secret to building a great board of Advisors? Below, members of Young Entrepreneur Council share their best tips.
- Determine what you “personally” Value in an Advisor + what your Startup needs. Value (experience, passion & availability); Needs: What resources are you missing? The best Advisors will strike a balance between what you “value” and what your company needs. Once you’ve identified someone you’d like on as an Advisor, it’s key to bring passion to your presentation to them without pressure. You want your candidate to have the same excitement and “vision” for the future of your company as you do, but also the space to gracefully decline if not a fit.
- Tell as many People you can think of, that you’re working on an exciting new problem and see who offers their help. There are thousands of amazing formal (standard fees) & informal (free or equity) Advisors for your Startup. But no matter someone’s background, there are a limited number of right Advisors for you & your startup. To identify Advisors, I tell everyone in my Network when I’m working on a new problem. The best Advisors are those who are interested enough in you and the problem you’re solving that they work for “free”. They analyze your execution, make introductions & advise your calls with no promise of payment. Once someone has created value for you, ask if they’d like to do so in the future. Your equity (& $$$) are limited. Save them for folks who truly care, not just someone with expertise.
- Actively search for Advisors board members with “different” backgrounds. We all have gaps in our backgrounds. One way to cover those gaps (if you haven’t already done it with a Partner or Team member) is to recruit Advisors from a variety of backgrounds. Both academic & financial analysis show companies with diverse Advisors see significantly higher financial performance. Even if they didn’t, having difficult (no, diverse) Advisors allows you to head off potential problems in advance.
- See “who” your Network knows and create a Shortlist of Candidates. Your existing Team, knows the product and can identify good potential candidates. You can also turn to your current professionals (Consultants, Accountants, Bankers, Attorneys etc) to get usable leads. Also consider family & friends. And hopefully, you have hundreds of contacts on LinkedIN.
- Look for people who have Failed, Learned & Bounced back. This may seem counter-intuitive at first, but I believe the most important experience any professional needs is failure. Failure is both inevitable & fantastic teacher, so any prospective advisor who has failed in the past will have terrific input to offer your company. In addition to having the ability to predict failure and help you avoid it, these Advisors can also help your company survive – if a large project fails. If they’ve never had a significant failure, investigate them more thoroughly.
- Qualifying Advisors. When you approach potential Advisors, give them a clear indication of why you want them and how you feel they can provide “value”. Once you have a shortlist of potential Advisors, “vet” them carefully to ensure that the ones who remain are a good fit (years of experience, similar Industries, a Startup Entrepreneur, etc)
- Try to find “informal” (free) Advisors before giving up Equity. The startup community is one where most Advisors are willing to have introductory & follow-up conversations if you’re respectful of their research & time. Usually relationships become richer with time, so if you think that these Advisors will be engaged and add value over time, then it would be worth adding them to your Team.
- Find a dedicated Advisor, who’s willing to put in the “time” you need. Startups should always be on the lookout for guidance from someone who has been there before – to be challenged by them – to help them grow. Finding that perfect fit isn’t always easy. Getting Advisors for the sake of an impressive name on your website does nothing to benefit your company. Instead, look for someone who is willing to help mentor you as a Founder – as well as your Startup and actually put in the time needed.
- Find someone who will make you a Priority. You need to be very selective when choosing Advisors for your startup, as they can have a large impact on your results. The startup scene is fairly crowded today and there are lots of Advisors ready to get on the bus (or bust) with a company that shows promise. This doesn’t mean that anyone who shows interest is the right match for you, though. Are they able and willing to make your venture a “priority? Look carefully at the person’s track record. Can they point to accomplishments with companies they’ve advised in the past? Another important question is whether or not they’re willing to “invest” in your startup. That shows a solid commitment. It’s always better to work with people who have a financial stake in the project.
- Last Resort: look to former Competitors. When looking to create an Board of Advisors for your company, it’s important to identify individuals who bring with them a abundance of expertise, ideally in addressing a problem similar to the one your Startup is trying to solve. Someone who founded or held a high position at a competitor can be an ideal candidate. Above all, be judicious about who you give equity to. In the early days of a Startup, it can be easy to give away shares in your company to people who aren’t truly providing “value” for the long term. Over the long haul, this can have a (-) impact on the members of your Team.
Comments: Do you know any other Steps to take to find & evaluate Advisors?
from Young Entrepreneur Council 18 Sept 18 enhanced by Peter/CXO Wiz4.biz
YEC is an invitation-only, fee-based organization comprised of the world’s most successful entrepreneurs 40 or younger. YEC members represent nearly every industry, generate billions of dollars in revenue each year and have created tens of thousands of jobs. In partnership with Citi, YEC recently launched BusinessCollective, a free “virtual” Mentorship program. Check it out !!!
For more Info, click on Advisors, Mentor.