This post by Ben Tedore
Starting a new company is hard, and finding people to help guide you is even harder. When people look to start a new business they commonly seek advice from friends or family or look to create a board of directors for their new venture. From a professional standpoint, this is probably not the way to go. Many entrepreneurs think that they will be playing in the big leagues if they have a board of directors, but the reality is that a board can be costly, will be hard to fill with knowledgeable people, and will not provide the time and energy needed to mentor and advise a fledgling company as they start. What any startup really needs is a board of advisors.
There are many similarities between advisory boards and a board of directors, such as providing strategic vision to the company and adding credibility and contacts to the business. However, an advisory board is much better for a startup because advisors have no fiduciary and are not liable for company failings, are generally unpaid, and will advise you more than a board of directors that meets quarterly. It can be difficult to find a good board of advisors for your specific company, but we have included some tips in this article to help.
The first thing to do when looking for a board of advisors for your company is to chart out where the weaknesses are in your management team and where you lack credibility and connections. For instance if you have a great new medical device and want to sell it to every hospital in the nation, but your team is has no business experience, it would make sense to look for an advisor who has business experience bringing medical devices to market. Getting an advisor with these skills will make you look more credible in the eyes of hospital purchasing departments, help you gain connections, and will help you learn from the advisors work. To actually find advisors, you have to first leverage your network to find people you or your connections know. Second, you have to be prepared to part with some equity (.5-2% vested over two years is standard). You should look for 3-5 advisors to fill your board, less and they will not want to be contrarians to their colleagues, more and they become less productive.
Once you have gathered up your board of advisors, you need to be able to keep them productive and helpful. This means that you have to share your vision of the company and listen, really listen, to their advice. If they are good advisors they have been there before and have wisdom to impart to you. Keep meetings centered on how you are going to steer the company to success in the future. If you need any help finding advisors please contact the Nevada SBDC or Score.