How to Build a Great Advisory Board for Your Business
Give one tip for building and compensating an advisory board?
To help entrepreneurs build a strong board of advisors for their business, we asked CEOs and founders this question for their best tips. From seeking candidates that ask questions to considering your business strategy first, there are several pieces of advice that could help build a great advisory board for your business in the future.
Here are 8 tips on how to build a great advisory board for your business:
- Seek Candidates that Ask Questions
- Leverage the Networks of Industry Veterans
- Chase Diversity
- Do Your Research and Make Valuable Connections
- Identify the Right Advisors
- Compensate Participation
- Value Cooperation Over Passion
- Consider Your Business Strategy First
Seek Candidates that Ask Questions
One tip for building an advisory board is to pay close attention to the questions candidates ask during initial conversations. While you do not necessarily want an advisor who aggressively interrogates you, you do want a partner who asks thoughtful and interesting questions about the business. Questioning signals that the advisor is interested in or even passionate about your business, and can be a sign that this partner will raise important considerations and challenge you to grow. Intense curiosity can also be an indication that an advisor will continue long term, which is important considering that advisory compensation often consists of equity.
Michael Alexis, TeamBuilding
Leverage the Networks of Industry Veterans
The number of years in the industry is often an excellent proxy for the network size. Advisory board members usually lack time, and their professional contacts are a significant way to leverage their assets efficiently. When facilitating it, they can bring people on board and pave the way to licenses and specialized know-how otherwise challenging to obtain.
Michael Sena, SENACEA
When building your advisory board it is important to ensure that you receive advice and mentoring from a variety of experts that represent your customers or market sector. It is also vitally important to ensure that you have expertise on the Board from people skilled and experienced in disability and diversity issues and inclusion and best of all people who have true personal lived experience through being disabled and/or diverse themselves.
There are over a billion people with disabilities worldwide so don't forget that customers with access and inclusion requirements are a vital part of your market, no matter what market you are in and without the right makeup of your advisory Board you could design your product badly, implement a bad marketing strategy or have a bad talent acquisition strategy that ignores this large population.
I am blind myself, use a seeing eye dog and am the founder and CEO of several startups.
Dale Reardon, All Accessibility Matters
Do Your Research and Make Valuable Connections
No matter the industry, there is always someone that has accomplished what you're trying to accomplish, so do your research and seek them out. But first, consider what you're trying to accomplish and the information that you might need to get there. This should be your guiding light, use the information and resources you need to know and get some referrals. Look for workshops, programs, conventions, webinars, etc. During your quest for knowledge you are bound to find quality advisors along the way. The perfect advisors can help you break into the industry so be sure to compensate them well. Depending on your working relationship, consider an equity compensation structure.
Erick Streelman, King's School
Identify the Right Advisors
It's important to find qualified advisors. This means looking for individuals with the relevant experience and expertise who can provide valuable insights and guidance. Make sure you do your research to identify individuals with the right skills and contacts.
Claire Westbrook, LSAT Prep Hero
A mistake that I made early on in my career as the co-founder of an EdTech company was assembling a high-powered advisory panel with unconditional compensation. However, one thing I didn’t count on was absentee advisors. More often than not, advisors would skip out on meetings or take weeks to respond to emails. I understand many of them were busy individuals with lots of irons in the fire, but in essence, we were paying big bucks for ghost advisors. That is why I now tie my advisory board’s comp directly to participation. Under the agreement, pay is directly tied to attending meetings and responding to a minimum number of calls and emails within a specified timeframe. If they don’t participate and advise us, they don’t get paid. It's that simple. In short, I wouldn’t give my advisors carte blanche pay, no matter how respected or powerful they are in the industry. You need to make sure you’re getting some bang for your buck.
John Ross, Test Prep Insight
Value Cooperation Over Passion
Value a skill like cooperation above personal passion, but only slightly. There’s an important and difficult balance to make in selecting board members with differing opinions who will be able to work productively with each other.
Gathering too many like-minded board members will defeat the purpose of having an advisory committee, yet gathering experts in any field will lead to disagreement and potential contentiousness. When building an advisory board, seek out good team players who are willing to compromise, but ensure all of your board members are qualified and committed to their oversight.
Dan Bladen, Kadence
Consider Your Business Strategy First
Building an advisory board from scratch is a process that must start from the evaluation of your business strategy. The demand for advisory boards for startups is at an all-time high level but considering the wide range of tasks they may be crucial at, approaching it wrongly will affect your business progress. Evaluate what crucial role the private company board will play; this could be offering expertise on marketing, customer relations or their main role may be to guide your business on its expansion ambitions. Along with building such a board, the compensation should be decided beforehand. For established businesses, a monthly or annual retainer works well. However, for a business still, in the infant stage, a carefully crafted equity compensation arrangement is the best option for it guarantees continued interest and dedication to growing the business.
Ryan Yount, Luckluckgo