Building a successful business is really hard. So you should do everything you can to improve your likelihood of success. Startup advisors often play an important role in improving the speed and outcomes for the startups they advise. This article explores what advisors are, what they do, and how to get the most out of them.
Putting together a strong board of advisors (BOA) can provide invaluable guidance as you grow your business. Advisors offer wisdom, connections and credibility that help take companies to the next level. Follow these key steps to build an advisors board tailored to your needs.
Step 1: Identify Your Needs
Start by analyzing where your company needs the most help and support. What are the current gaps in skills experience or networks? What challenges or opportunities are coming up that require specialized expertise? What areas would outside perspective or counsel be most useful?
For example you may want to add advisors with expertise in
- Your industry or target markets
- Business operations and strategy
- Financial management and funding
- Sales, marketing and PR
- Technology and product development
- Legal and regulatory issues
Defining your advising needs guides who you target and how you structure the board.
Step 2: Draft Advisor Profiles
With your needs identified, write profiles for each advisor role detailing:
- Background, skills and experience required
- Expected contributions and responsibilities
- Time commitment expected
- Terms of compensation, equity or incentives
This clarifies what you want from advisors and helps find best-fit candidates.
Step 3: Source and Recruit Advisors
With role profiles defined, begin sourcing potential advisors from:
- Your existing network and contacts
- Customers or partners open to the role
- Alumni of your college or university
- Trade associations and industry groups
- Investors or lenders connected to your business
- Referrals from other entrepreneurs
After identifying prospects:
- Have exploratory discussions to gauge fit and interest.
- Send role profiles so they understand expected involvement.
- Formalize involvement through advisor agreements.
Build in flexibility to modify advisors as company needs evolve.
Step 4: Finalize Contractually
Formal advisor agreements should cover:
- Role, responsibilities and time commitment
- Duration of service term
- Confidentiality and IP ownership
- Compensation and reimbursement
- Grounds for removal or resignation
Legal counsel can help craft suitable advisor agreements that protect both parties. Clarifying expectations upfront minimizes confusion.
Step 5: Set Key Performance Indicators
Define key performance indicators (KPIs) to track the impact of your advisors board, such as:
- Capital raised with advisors’ help
- Revenue growth attributed to advisors’ counsel
- New partnerships created through advisor networks
- Cost savings from advisors’ operational advice
- Industry awards or recognition secured with advisors’ input
Regularly reviewing KPIs ensures your advisors deliver value that exceeds costs.
Best Practices for Managing Your Advisors
Once established, your advisors board requires ongoing management:
- Hold regular full team meetings to tackle big picture objectives. Monthly or quarterly works for most.
- Schedule one-on-one consultations to address individual advisor contributions.
- Circulate regular updates on company performance and upcoming decisions to enable advisors to give informed counsel. A monthly report or call works well.
- Solicit advisor feedback on how to improve their experience and impact.
- Mix up meetings between video conferences and in-person gatherings when possible.
- Facilitate advisor interactions with company leaders and technical staff so insights can be shared across your organization.
- Coordinate advisor input on major initiatives in their domains of expertise to take full advantage of their knowledge.
- Proactively remove underperforming advisors who do not meet expectations after feedback.
Key Benefits of a Board of Advisors
If cultivated well, an advisors board can provide wide-ranging benefits:
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Strategic guidance: Advisors offer an external perspective on plans, opportunities and decision points. Their experience gives them foresight into where your business is heading.
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Industry expertise: Advisors often have deep knowledge of your market, technologies, regulations, and competitors. They can advise on trends, risks and positioning.
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Operational wisdom: Seasoned operators know the practical side of starting and scaling companies. They identify gaps in capabilities early on.
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Network expansion: Well-connected advisors open doors to potential partners, talent, investors and customers. Their reputation often carries weight.
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Confidence building: Advisor involvement signals you are scaling seriously and have external validation. This inspires confidence in employees, investors and partners.
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Sounding board: Advisors provide a trusted, confidential forum to think through ideas and concerns. They ask provocative questions and play devil’s advocate.
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Oversight: Advisors look out for company interests. They provide oversight and accountability on finances, ethics, risk and governance issues.
Helpful mentors dramatically increase fundraising success
Examples like the above are probably why startups with helpful advisors raise so much more money than ones that donât. The Startup Genome Report shows that average funding raised by stage was dramatically higher for startups with helpful advisors.
Funding raised is a reasonable proxy for startup success and progress. The findings from the Startup Genome Report imply that beyond validation stage in particular, startup advisors add tremendous value. In fact, it appears that startups that âdonât have helpful mentorsâ donât raise any money at scaling stageâanother way of saying that most never get there.
// Insights
Building a successful business is really hard. So you should do everything you can to improve your likelihood of success. Startup advisors often play an important role in improving the speed and outcomes for the startups they advise. This article explores what advisors are, what they do, and how to get the most out of them.
- What is an advisor?
- Do advisors invest in the company?
- Why you need advisors
- Real life examples
- Helpful mentors dramatically increase fundraising success
- Why you need REAL advisors
- What to look for in advisors
- Forming your advisory team
- Advisor Compensation
- Advisor contracts
- Maximizing advisor contributions
Recruit startup advisors board of directors
How to form an advisory board?
In forming the advisory board, the entrepreneur should carefully consider his or her critical knowledge gaps so as to identify appropriate advisors. The path of sound credence is through the thick forest of skepticism. 2. Recruit doubters. No entrepreneur needs yes men disguised as advisory board members.
What is a board of Advisors?
A Board of Advisors is a group composed of business professionals that provides advice on how a business owner can better manage his company. Because of the informal nature of this type of board, it can be structured in a way that the owner deems necessary and most helpful to his company.
What is a business advisory board?
Because of the informal nature of this type of board, it can be structured in a way that the owner deems necessary and most helpful to his company. Advisors typically receive stock-based compensation, such as Options, and benefit from an increased valuation of the business.
How to create a good board advisor?
Find the right chemistry. A new board advisor should not only click well with you but also with the other C-suite executives and the rest of your board. If the chemistry is there, you can assign each advisor the right tasks with less risk of conflict or ego getting in the way of productivity. 3.
