I’ve been reading a lot of different articles on building an advisory board. I came across an article by Mark Suster. Mark is a two time startup founder. In the article Mark shares “Should you have an advisory board“.
Under deliver relative to expectations
Mark states that in his experience “most advisory boards under deliver relative to expectations. The people that the CEO usually picks are prominent people who are busy with their own companies. Often times the startup will give up to 2% equity in the company to advisory board members.”
Rather than focus on whether or not that is too much equity, I’d have to ask why pick prominent people that are busy building their own company? Seems like that is quite possibly the wrong approach. Yes, it’s nice to have successful people that are well known which you can associate with your company, but, if they are too busy you’re probably not going to get the value out of them. One other solution may be to talk with people that are 10-15 years older than you that perhaps are now semi-retired. One of my entrepreneur friends has told me he has gone this route and found that they are happy to give back to the entrepreneur community.
Run Semi-Annual Advisory Dinners
Mark Suster states: “Run semi-annual advisory dinners – Don’t try to solve the world’s problems with your advisers. One of the things that should attract advisers to your company is the thought that they’ll get to spend time with other luminaries that they respect. So one of your sales pitches to them to join is the other people you have on board (or are approaching). Promise them that you aren’t going to ask for tons of time and the main participation is just 2 dinners / year. Use these occasions to get them bought into your strategy and strengthen your relationship so that when you do need help you’re more likely to get it. Using this approach you may be able to get a few key advisers with no equity at all. Under this scenario I’m all for advisers. Have 8 of them!”
That approach seems like a great approach. What approach have you tried? What has worked and what hasn’t? Are you curious to learn more about forming an advisory board? If yes, we’re having an event here at thinkspace on Tuesday, May 17th from noon to 1pm. Register here!