Signing out of account, Standby…
Advisors are more than a wealth of knowledge; they’re advocates for your business that you cannot go without.
Never be the smartest person in the room. If you are, then you’re in the wrong room. That’s one piece of advice I would give to all entrepreneurs.
As a founder, the talent you hire at your startup is crucial. While difficult to attract and retain any employees at all, the individuals you bring on board should ideally be more knowledgeable than you in their respective domains. After all, startups are built by generalists and scaled by specialists.
It’s no secret that entrepreneurs are expected to be versed in many areas. Nonetheless, with so many aspects to building a business, founders often hire employees to fill gaps in their knowledge or experience. Top talent isn’t cheap, however, which leads us to an advisory board.
Below I discuss the importance of having advisors, steps to ensuring the right fit, typical terms offered and ways to leverage the most value from these relationships.
Related: Why Every Entrepreneur Needs a Board of Advisors
An advisory board is a group of individuals whom you trust, as the leader of a startup, to provide valuable business advice. The role of an advisor is, in essence, to serve as a mentor for both you and your company.
For the most part, advisors typically offer suggestions or guidance in the following areas:
Your board should be diverse. Whether it’s a CMO who can coach you on marketing or a lawyer to help navigate legal challenges, advisors are meant to be complementary to you as a founder. Relationships with these individuals will often be personal, and at times informal, leaving both sides to communicate via text, email or video chat.
Related: 8 Steps to Creating an Effective Advisory Board
The most common question asked is: Does the return of an advisory board justify its cost?
I generally recommend that all entrepreneurs recruit advisors as the foresight of these individuals is often invaluable. Many founders initially balk at the idea of giving up equity, however, seldom regret this decision as they progress.
With prior experience to offer, advisors allow entrepreneurs to eliminate countless mistakes that could very well prove fatal to any startup. It only takes a few occasions to see an advisory board investment return tenfold, and on that note, let’s look at some of the benefits of having advisors.
Once you decide that an advisory board is suitable, it’s time to begin your search.
Related: 10 Reasons Why Leading Entrepreneurs Join a Peer Advisory Board
Finding people is easy, but finding the right people is tough. Here are some tips to consider as you look to fill spots on your advisory board.
Related: What Makes a Great Company Culture (and Why It Matters)
Once you have advisors in mind, both parties should align on the expectations prior to commencing a working relationship. Typically, this is set forth in a written agreement that explicitly outlines the tasks, responsibilities, and compensation of an advisor. Here are a few items that should be included:
As any successful entrepreneur can attest, the people whom you surround yourself with determine your success. Building an advisory board can accelerate your company’s growth in more ways than one and help navigate that oh-so-treacherous early startup phase, where most businesses are doomed to fail.
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