I talk a lot about the importance of advisory boards for startups. I believe creating an advisory board is one of the most important things you can do for your company. But you have to do it the right way.
Tips on how to choose advisory board members
- Choose between four and six people. You want enough for there to be dialogue and not too much that you can’t move through your agenda.
- Diversity is key. That can mean many things, but you want to have different view points and constructive debate within the group.
- Reach high. You’ll be surprised the caliber of person that will agree to be on your advisory board. I’ve found people love to give advice and help younger versions of themselves.
- I try to have at least one person with experience/expertise in the following areas: someone with direct experience in the type of business you’re creating, someone that has been on the client side, a marketing person, and a financial person. There is debate on whether you want a legal voice in the group as some believe it can stifle creative discussion.
- Think of the chemistry of the group. You want people that are going to enjoy each other’s company.
Tips on how to run effective advisory board meetings
- Send out pre-reading several days before. The more knowledgeable the group, the more of an impact they can make.
- Keep the meeting to two hours and hold them once a quarter. If you’re very early in your startup you could do two or three times a year instead of once a quarter. You want to have enough progress for them to react to.
- Start each meeting with a 15 minute overview and reminder of the goals for the year and how you’re progressing against them. Make sure you ground everyone before you start into the issues. Plan on this section taking 30-45 minutes so there is time for Q&A.
- Try to have three or four main topics to discuss. Big issues such as: should you consider opening up an office in a new city, or making that big executive hire, or moving into a new service area. This is the real reason you have them, to help you navigate those big decisions.
- Listen and take notes. You don’t have to “do” what the advisory board suggests as they have no official power, however you should make sure they feel like you are listening to them and taking their advice seriously.
- Share anything they ask. This is a group that, as you will remind them at the beginning of the meeting, can be trusted and will keep all secrets to themselves. You can also think of this group like a therapy session and the more honest you are, the more effective it will be.
- Leave time in the agenda for open questions.
- Only have two people on your side in the meeting, unless you have specific reasons to pull in another person. There are many reasons for this, the easiest of which is that you might have to talk about some of your team and if they are in the room that becomes more difficult. You also want the conversation to move quickly and fluidly and you want the advisory board to do most of the talking, and if you have too many of your people in the room it will change the dynamic.
- Personally I prefer dinner meetings as the people on your advisory board probably have busy schedules, but you can ask them what they prefer.
I also recommend trying to give the advisory board stock options so that they feel more a part of the company. It can be a small amount of stock but its a nice gesture and you want them to feel as connected to the business as possible.
But most important of all, get yourself an advisory board. It’s one of the smartest things we ever did and it contributed immensely to our success.