Lately I’ve been having quite a few conversations with entrepreneurs about “the” Board of Advisors (BoA). I’ve been both on a BoA and an entrepreneur with a BoA. But I can’t help but weigh my comments more heavily from an entrepreneurial lens.
So, when asking “who should I put on my Board of Advisors?” I think the key first question an entrepreneur needs to ask herself is, “what do I want out of my Board of Advisors?”.
First and Foremost It's Where You Can Get "Raw & Naked"
SIDEBAR: I’d always used the term cone of silence/trusted place but am appropriating the ‘raw & naked’ term from fellow entrepreneur Daryl Hatton. Raw & naked is much more representative of the type of relationship you have with your BoA; you bare it all.
You, the entrepreneur, don’t report to the BoA – a key difference from your BoD – and, probably of most worthy note, members of your BoA are usually involved predominantly because of YOU. They trust YOU, believe in YOU, want to help YOU. This is another key difference between the BoA and your BoD. The BoD represent the interest of the shareholders, hold a fiduciary responsibility, as well as protect/represent their investment.
In front of your team, BoD, key stakeholders, customers, etc., you need to have your game face on. You need to keep the team motivated, you need to be transparent with your communications and yet you also need to exude confidence and calm. And, given the sensitive or even confidential nature of some of what happens as you build your company, you can’t disclose it outside the company walls.
So, you need a place where you can disclose all of your fears, anxieties and concerns. Talk through various opportunities and challenges and get advice from professionals who, although consider the company’s best interests, are also weighting your interests as much, or even more.
As the entrepreneur, you are typically wholeheartedly vested in your baby. You sacrifice your health, personal relationships, finances … because you want to do best by your company. Having a BoA that is considering your interests is fundamental to not only your well being but also, in the long-run, the company’s.
You can either choose from people you know well, get to know people you’re considering to have on your BoA, or get to know these people through being on your BoA. It’s like recruiting team members, at the end of the day, until you see them in the relevant environment you can’t accurately assess their fit with the respective role.
With my 2nd company, Atalum, my first Advisors were people with whom I’d worked previously: Mike Serbinis, Founder & Vice-Chair Kobo (fellow co-Founder DocSpace); Ken Nickerson: Angel, Inventor (Angel DocSpace); Ed Wear, CA (CFO DocSpace, and yes, my dad).
These were people I trusted implicitly, who understood financial transactions and negotiations, had experience in the startup space and were wicked smart. However, more than anything, I knew they cared more about me than the company. And, that’s what you need and want especially at the startup stage. I also knew I could pick up the phone, call them and they would answer. I never took that for granted, and appreciate it more than they’ll ever know.
At Atalum there were 3 pivotal moments where my BoA was instrumental. The first two were during my contract negotiations for my $1.5M equity financing (Ed Wear; Ken Nickerson), the third was when I was trying to raise a $5-7M round (Mike Serbinis).
When you’re building a company, especially trying to establish a market presence, the ability to call on someone who has the capacity to provide insightful advice while also considering the YOU in the equation is, to paraphrase Mastercard “priceless”.
Relevant & Diverse
One last thought, your BoA should comprise relevant and diverse expertise. The expertise varies depending on the stage of the company’s life-cycle. Earlier on, when you’re still trying to figure out the complexities of the product-to-market fit, scrambling to make ends meet and hustling really hard, it will be most important to have someone with startup experience. As the company matures, you’ve built some recurring revenue, validated your product, begin to understand your customer and/or user base then the expertise you should source will relate more to the strategic objectives of the company. For example, in DocSpace when we moved from focusing on a SaaS offering for enterprises to adding a consumer service we needed to rely more on Advisors who understood the online consumer space.
Not “Who” but “What” You Need to Answer First
No matter what, you want a BoA that even when they see you raw, naked and not at your best they support you and are able to provide the insight and expertise you need. Support because of the relationship you’ve built with them; insight & expertise based on the strategic needs of the company.