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s you sit at your desk, working another late night, you’re exhausted. You fill multiple positions at your company and you may be wondering: is it time to let others take on different departments within your startup? If that’s the case, maybe it’s time to hire an advisor or an advisory board. An advisor is an individual or group of individuals that form a board (advisory board) that startup founders carefully select to help guide their business.  

Your advisors lend their expertise on all sorts of business issues, legal advice, marketing or sales, finance and many other categories depending on your business’ needs. Most startups choose to bring in advisors to aid growth of new ventures. Startup advisors act as mentors for the business and essentially aid in decision-making for the company, especially during the early stages. Founders have the privilege of structuring advisory boards based on their own preference.  

Not all businesses need an advisory board, but that is up to the discretion of the founder. Let’s say that you want to open up a boutique sandwich shop as your new startup venture. Does your sandwich shop really require an advisor to help you figure out what type of bread to use? No, not really. But you could use an advisor to plan out how to market your sandwiches. For this, you would need an advisor who has qualified experience in sales or PR/marketing. Perhaps you would benefit from having an advisor experienced in the food/beverage industry that could show you the ropes. With advisors, you do not need to be an expert in every aspect of your company.  

According to Alicia Syrett, Founder and CEO of Pantegrion Capital, “having an active and vocal advisory board is necessary when the entrepreneur feels that it is beneficial to the company. It is up to the entrepreneur to manage the relationships by dialing up or dialing down the expectations of involvement depending on what they think is best for the company.”  

Having the right advisors can pave the way to your startup’s success

Advisors essentially exist to make sure your business is thriving. As a startup founder, you must be able to identify what your business is lacking in experience or knowledge. If you think that you need help to fill the holes in your business, having the right advisory board will help you pave the way to success. Another thing to consider is that, if founders are looking to find potential investors to help their business grow, having an advisory board can peak interest in these investors. Alicia Syrett also states that “having recognizable names on an advisory board…can be beneficial in generating interest as the investors will likely want to know more about why that advisor wanted to get involved and what they're contributing.”  The people you select to be on your advisory board should be there in the early stages of your business and help you along the way. Over time, you develop trust with your advisors and these individuals could even be part of your business for the long run.  

Who should be in your advisory board & how do you reel them in?

“To set up your own advisory board, look for individuals whose business acumen you admire. Include members with a variety of areas of expertise, both in general business and specific to your industry.” - Lois Mitten, founder and CEO of Children's Discovery Center.  

Mitten formed her advisory board after opening her first center more than 20 years ago and emphasizes on how her board helped her build Children’s Discovery Center to what it is today. One of her advisors included a college mentor, who once taught her that many businesses fail without an advisory board and that efficiently utilizing a strong board can mean the difference between success and failure.  

The general makeup of an advisory board includes a legal advisor, an accountant, a marketing expert, a human resources expert, and perhaps a financial advisor. The best thing about advisory boards is that they solely depend on what the founders and startups need. The founders have the power to be creative with their advisory board and pick and choose whoever they want. You must first access where your business requires assistance and, from there, work on acquiring the specific advisors you need. Entrepreneur online writer Will Bins shares a few characteristics and expertise to look for when building your advisory board:  

  • A solid product manager in your niche
  • Someone with lots of proven online marketing and user acquisition experience
  • A well-connected PR person — especially old school, offline PR
  • A finance person with tons of corporate development experience
  • A product manager who knows how to build things that solve the problem
  • An online marketer who knows how to bring people to your solution
  • A PR person who can create synergy by connecting you to brands they work with that have way more traction than you.
  • A finance corporate development person (who knows investors)

Aside from the traits mentioned by Bins, it will be ultimately beneficial for you as a founder to source advisors from your own circle of colleagues and friends. It’s time to start stalking your LinkedIn connections! By finding advisors that you have personal relationships with, collaboration is easier and more relaxed.  Compensation depends on your relationship with your advisors. If they are personal friends or connections, compensation often comes in the form of the monthly advisor meeting over lunch. At times though, advisors are compensated by means of equity in your business. This can mean from 0.10% - 2% depending on the value your advisor can bring to your business, time invested by your investor, or length of contract.  

If your business is still in its bootstrapping stage and still acquiring funding, try to seek advisors from your own personal circle. You might be surprised with how much your friends, family, and colleagues can actually help you to build your new business.   The moment your dream team is assembled, be very clear about your business goals and how you expect your advisors to help you attain these goals. Set responsibilities and scope of management. At what point can your advisors make decisions? Do you want them to take active management roles? You are the boss, so you set the rules! Establish structure early on. Get the most out of your advisory board by regularly scheduling meetings (once a month or more) either individually or as a group. Lastly, never forget that your advisors are working with you because they believe in your business, so keep them in the loop. Treat these individuals as indispensable members of your business and they will guide you to success.

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