Picking a Business Advisor #1
from Becoming Awesome.com 6/11 enhanced by Peter/CXO Wiz4biz
Key/ Official Business Advisors constitute only a handful of the larger subset of people who give you advice to start or grow your business. And yet they deliver a huge portion of the value – the Pareto principle in action – 80% of the Value from 20% of your Advisors. They are virtually necessary when you’re seeking funding to show you have a strong experience base to handle anything that comes along. I’d like to explore what makes these relationships work.
Traits of your Key Advisors. What makes these relationships different and so hugely valuable to a startup?
· Key Business Advisors [KBA] are truly committed to helping your business succeed. There is a big difference between making an introduction and putting your reputation on the line. Key business advisors will go that extra mile for you.
· Deep experience in the challenges a startup faces is critical. But that kind of talent tends to be readily available. What separates a KBA is the depth of their insight into your particular field.
· KBAs are passionate about the company direction and about the Founding Team & Senior Management. Both are required – because it’s a long, bumpy road to success.
· These relationships are longitudinal. A Key Biz Advisor can offer perspective over years of inter-action as a startup grows. Don’t make someone a KBA unless you believe they will offer value over your early growth years. At the same time – it’s not permanent and the needs of a company and advisor will change over time.
How to Interact with your KBA
· Advisor vs Board member. First off – mutually discuss and recognize the difference in the relationship. There is a big difference between an Advisor & Board of Directors. Advisers get involved deeper & broader in your issues; Board Members are more about legal issues, structure, control & direction of your company.
· Inter-action time can vary pretty wildly depending on your current issues, your growth phase or other things going on for the advisor. A general rule of thumb is a solid conversation on key issues at least twice a month, with things getting much deeper, when needed. They are consulted on all key business decisions.
· Compensation is rarely cash and is very likely equity. Advisors don’t expect to get rich off of those options – but it’s a truly important signal of commitment and an alignment of incentives.
· Investment. Your advisor should be willing to invest alongside others in fund-raising rounds. Again – this is mostly a symbolic gesture – but be wary of advisors who refuse to put their money where their mouth is (unless they truly don’t have the means.)
· Identify the “needs” of your Advisor – and make sure they are getting what they need as well (see below).
[ What the Advisor gets, Giving back, Equity, Patern Matching, Gaining Perspective continued in Premium Content ]
Advisor: If you ever need any help with starting, growing or improving your Business, contact Peter thru Wiz4biz. I’ve had over 40 years experience and I’m sure I can share some good ideas or find someone who could !!!