Every entrepreneur remembers the days of doing it all (perhaps because some of you are still in that phase!) Negotiating contracts, pursuing early adopters and emptying out the coffee pot at the end of the day was (or is) all in day’s work. But there comes a time in all early-stage companies when you need to expand your organization with the support of key influencers. Here at Arc, we’ve found substantial success for our portfolio companies and clients by building highly acclaimed advisory boards and then leveraging these boards for years to come.
There are no hard and fast rules about building an advisory board, but there are some basic tips we want to share:
- Define your goals prior to asking for a commitment. You should be very clear about what goals you have for the advisory board as a whole and for individual members, keeping in mind that advisory board members do not have any fiduciary responsibilities to the business.
- Search out people who know more than you do. Surround yourself with people are key influencers within their functional expertise, and who know more than you do in the areas critical for achieving success.
- Identify people who will be willing to stand up for you – and to you. For an advisory board to be effective, they need to be willing to stand up and provide honest feedback in the market that supports your mission. And company members must leave their egos at the door and be willing to listen to their advisory board – otherwise, the whole exercise will be a waste of everyone’s time.
- Remember that you are creating a team. Like any team, you have to spend time together, which is why regular, required meetings – whether formal in-person meetings, informal virtual meeting or webinars – are essential to help build your team.
- Compensate them. You need to compensate your board – but not necessarily with money. Figure out what kind of compensation may be meaningful to the group and to individuals. For example, Science Companion compensated its advisory board members by paying travel and expenses for an annual in-person meeting to varying locations (Asilmor, Pacific Grove, CA and downtown Chicago) where board members could build vacations into when the work was done.
- Be flexible in the board’s composition. As your business matures and changes, it is critical that you continue to evaluate the goals of the advisory board and its composition, adding or dropping members as your needs dictate.