One of the most important decisions an entrepreneur must make is the selection of advisory board members for their startup.
Selecting the correct members to serve on the advisory board is important as the right board members can provide substantial leverage to the company’s efforts to become fundable and grow/scale.Candidates should be assessed for fit based on the startup’s needs, the experience and capabilities of the potential advisor and their willingness to actively engage and participate.
By addressing the questions below, the entrepreneur can improve the selection process for candidates to serve on the board:
- Will the candidate’s skill set and experiences be complimentary to management, filling knowledge gaps?
Successful entrepreneurs pull together strong management teams. However, no startup team is capable of covering all issues and most have blind spots. Selecting advisory board members with differing backgrounds from those of management, from differing cultures, genders, ethnic groups, industries and geographies, etc., supports the analysis process by ensuring the capabilities are available to consider an issue from all potential angles. Debate should be healthy and comprehensive.
- Is the candidate experienced with raising funds for startups?
A key issue all startups face is the raising of funds for the development and growth of the company. Raising funds requires a substantial effort by key members of the management team, especially the CEO. Many start-ups encounter significant management distractions during this process, which can last for months. An advisor with a strong understanding of the fundraising process can both focus management on important aspects of the effort and reduce the process time required and related distraction to the management team.
- Does the candidate have a strong network of contacts and influencers?
Advisors with a personal portfolio including significant numbers of contacts can potentially support geometric growth. Additionally, such advisors usually have a broad and diverse breadth of contacts from which the company may be able to obtain support.
- Will the candidate be actively engaged and provide unbiased input?
For the advisor to provide high levels of value, she/he must be willing to engage and actively participate in required company/public meeting and events. In addition, they must be independent and willing to openly share with and challenge management’s perspectives as well as those of the other advisors.
- Is the candidate accessible and available?
Does anyone on the management team know the candidate or does anyone have contacts that can foster an introduction? If not, are there alternative means of which an introduction can be secured? Do you believe the candidate possesses the desire and time to support the company by serving as an advisor? Spending time in pursuit of a candidate who will ultimately be inaccessible or lacks time to actively participate is a distraction and waste of management time.