20 - Mentors and Board

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					20. Mentors, Advisors & Board


     The	
  biggest	
  things	
  that	
  will	
  slow	
  your	
  business	
  
     down	
  to	
  a	
  crawl	
  are	
  the	
  things	
  you	
  can’t	
  see	
  
     coming;	
  great	
  advisors	
  and	
  board	
  members	
  can	
  
     help	
  you	
  see	
  them,	
  and	
  prepare	
  for	
  them.


     In	
  this	
  chapter	
  I	
  review	
  how	
  to	
  court	
  the	
  right	
  
     mentors	
  for	
  your	
  business,	
  and	
  offer	
  them	
  a	
  
     posi>on	
  on	
  your	
  Board	
  of	
  Advisors.


                            For	
  those	
  of	
  you	
  looking	
  to	
  raise	
  
                                     money	
  for	
  your	
  corpora>on,	
  
                                            understand	
  the	
  obliga>ons	
  
                                              you	
  have	
  to	
  your	
  Board	
  of	
  
                                                    Directors.	
  Learn	
  how	
  
                                                     to	
  structure,	
  select	
  
                                                        and	
  orient	
  a	
  new	
  
                                                           board	
  members	
  so	
  
                                                           that	
  they	
  are	
  
                                                           beBer	
  primed	
  to	
  
                                                          help	
  you	
  grow.
What You Don’t Know


 There’s	
  one	
  thing	
  that	
  trips	
  up	
  all	
  new	
  business	
  owners:	
  the	
  things	
  
 that	
  you	
  don’t	
  know	
  that	
  you	
  don’t	
  know.	
  Confused?


 There	
  are	
  things	
  you	
  know,	
  and	
  skills	
  that	
  already	
  you	
  have.	
  There	
  are	
  
 also	
  things	
  you	
  realize	
  you	
  don’t	
  know	
  yet,	
  and	
  plan	
  to	
  learn	
  or	
  




                                                                                                                  Chapter 21: Mentors, Advisors & Board
 prepare	
  for.	
  


 Then	
  there’s	
  a	
  third	
  category:	
  things	
  you	
  don’t	
  even	
  realize	
  you	
  are	
  
 unaware	
  of.	
  Most	
  businesses	
  run	
  into	
  real	
  trouble	
  in	
  situa>ons	
  that	
  
 they	
  haven’t	
  encountered	
  or	
  even	
  considered,	
  because	
  they	
  haven’t	
  
 adequately	
  prepared	
  for	
  them.	
  


 For	
  example,	
  part	
  of	
  Docstoc’s	
  revenue	
  comes	
  from	
  our	
  online	
  
 subscrip>on,	
  and	
  the	
  issue	
  of	
  chargebacks	
  was	
  never	
  even	
  on	
  my	
  
 radar.	
  I	
  never	
  considered	
  puKng	
  a	
  chargeback	
  communica>on	
  plan	
  in	
  
 place,	
  because	
  I	
  didn’t	
  know	
  it	
  could	
  be	
  a	
  serious	
  concern.


 My	
  ignorance	
  lead	
  to	
  the	
  credit	
  card	
  company	
  telling	
  me	
  that	
  they	
  
 were	
  puKng	
  some	
  of	
  the	
  money	
  we’d	
  earned	
  on	
  hold.	
  Because	
  we	
  
 were	
  blindsided,	
  it	
  look	
  us	
  longer	
  to	
  recover	
  and	
  learn	
  from	
  this	
  
 setback.


 Those	
  issues	
  that	
  you	
  never	
  see	
  coming,	
  those	
  are	
  the	
  reasons	
  you	
  
 court	
  mentors	
  and	
  advisors.	
  Read	
  on	
  to	
  learn	
  how.
Courting Advisors


 My	
  advice	
  when	
  seeking	
  mentors	
  is	
  to	
  find	
  someone	
  who’s	
  done	
  
 something	
  very	
  similar	
  to	
  what	
  you	
  are	
  trying	
  to	
  accomplish.	
  Feel	
  out	
  
 whether	
  or	
  not	
  you	
  get	
  along	
  personally,	
  and	
  if	
  you’d	
  like	
  to	
  work	
  with	
  
 them	
  in	
  the	
  future.




                                                                                                                      Chapter 21: Mentors, Advisors & Board
 You	
  can	
  start	
  off	
  lightly,	
  by	
  asking	
  the	
  person	
  out	
  for	
  some	
  coffee	
  so	
  
 you	
  can	
  chat	
  and	
  get	
  some	
  advice.	
  


 If	
  you	
  like	
  them,	
  you	
  can	
  offer	
  them	
  an	
  official	
  posi>on	
  on	
  your	
  board	
  
 of	
  advisers,	
  which	
  offers	
  them	
  equity	
  and/or	
  some	
  other	
  way	
  to	
  
 compensate	
  them	
  for	
  their	
  energy	
  
 and	
  contribu>on.


 I	
  made	
  it	
  my	
  goal	
  from	
  my	
  first	
  
 day	
  as	
  an	
  entrepreneur	
  to	
  build	
  a	
  
                                                                      Quick Tip
 large	
  network	
  of	
  advisers,	
  and	
  
 consistently	
  ask	
  them	
  for	
  not	
  only	
                  For more specific
 general	
  feedback,	
  but	
  for	
  advice	
                       tips on putting
 on	
  anything	
  I	
  might	
  be	
  missing.                       together and
                                                                      leveraging an
                                                                      Advisory Board,
 I	
  consistently	
  asked	
  them	
  “What	
  
                                                                      check out this video
 am	
  I	
  not	
  seeing	
  here?	
  What	
  issues	
  
                                                                      or this one.
 lay	
  ahead?	
  How	
  can	
  I	
  prepare	
  for	
  
 these	
  problems?”
Working with a Board of Directors


  To	
  review	
  the	
  chart	
  in	
  Chapter	
  4,	
  the	
  structure	
  of	
  a	
  corpora>on	
  is	
  
  broken	
  down	
  by:


  1) 	
  Shareholders:	
  the	
  owners	
  of	
  the	
  company	
  who	
  select	
  the	
  board

  2)	
  	
  Board	
  of	
  directors:	
  the	
  fiduciaries,	
  who	
  selects	
  the	
  officers




                                                                                                                    Chapter 21: Mentors, Advisors & Board
  3)	
  	
  Officers:	
  CEO,	
  CFO,	
  CTO	
  and	
  others	
  who	
  manage	
  the	
  company


                                     In	
  smaller	
  companies,	
  people	
  may	
  be	
  a	
  part	
  of	
  
                                            more	
  than	
  one	
  of	
  these	
  categories.


                                               If	
  you	
  go	
  out	
  and	
  raise	
  money	
  for	
  your	
  
                                               company,	
  you’re	
  almost	
  always	
  going	
  to	
  
                                               have	
  a	
  board	
  of	
  directors.


                                                                The	
  key	
  thing	
  to	
  remember	
  is	
  
                                                                 that	
  as	
  soon	
  as	
  you	
  have	
  a	
  
                                                                   board	
  of	
  directors,	
  
                                                                       par>cularly	
  if	
  you’re	
  not	
  
                                                                         the	
  majority	
  owner	
  of	
  
                                                                                 your	
  company	
  
                                                                                    anymore,	
  you	
  
                                                                                        will	
  have	
  to	
  
                                                                                             answer	
  to	
  
                                                                                              the	
  board.	
  
You	
  can	
  remain	
  the	
  main	
  operator,	
  and	
  be	
  the	
  primary	
  force	
  driving	
  
your	
  business	
  forward,	
  but	
  you	
  need	
  to	
  keep	
  your	
  board	
  in	
  the	
  loop.	
  
They	
  will	
  have	
  regular	
  mee>ngs,	
  and	
  a	
  vested	
  interest	
  in	
  the	
  success	
  
of	
  your	
  company.


When	
  you	
  raise	
  money	
  for	
  your	
  business,	
  o^en>mes	
  some	
  of	
  your	
  
more	
  ac>ve	
  investors	
  end	
  up	
  being	
  on	
  your	
  board.	
  So	
  my	
  advice	
  is	
  
not	
  to	
  think	
  that	
  the	
  sales	
  process	
  has	
  ended	
  once	
  you’ve	
  raised	
  
money;	
  it	
  has	
  just	
  begun	
  with	
  your	
  board.	
  A	
  big	
  part	
  of	
  managing	
  
your	
  board	
  of	
  directors	
  is	
  consistently	
  over	
  communica=ng,	
  making	
  




                                                                                                              Chapter 21: Mentors, Advisors & Board
sure	
  there	
  are	
  no	
  surprises,	
  and	
  over	
  delivering.




   Video Tips: Board Selection & Structure

    Q: How do I                           Q: How do I                        Q: How do I
    structure my                          choose the                         orient new board
    board?                                right board                        members?
                                          members?




      A: VIDEO                              A: VIDEO                             A: VIDEO
Resources Recap

• 	
  Advisors
       • 	
  Board	
  of	
  Advisor	
  Agreement	
  (legal	
  doc)	
  
    • 	
  Keys	
  to	
  Finding	
  a	
  Business	
  Mentor	
  (video)
    • 	
  How	
  an	
  Advisory	
  Board	
  Can	
  Benefit	
  Your	
  Company	
  




                                                                                                Chapter 21: Mentors, Advisors & Board
      (video)
    • 	
  PuKng	
  Together	
  a	
  Great	
  Advisory	
  Board	
  (video)
    • 	
  Crea>ng	
  a	
  Personal	
  Board	
  of	
  Advisors	
  (video)


• 	
  Board	
  of	
  Directors
       • 	
  What	
  does	
  a	
  Board	
  of	
  Directors	
  Do?	
  (ar>cle)
    • 	
  Minutes	
  of	
  a	
  Mee>ng	
  of	
  the	
  Board	
  of	
  Directors	
  (legal	
  
      doc)
    • 	
  How	
  are	
  Board	
  Members	
  Compensated-­‐	
  Shareholder	
  
      Director	
  Agreements	
  (ar>cle)
    • 	
  Structuring	
  a	
  Board	
  of	
  Directors	
  (video)
    • 	
  Tips	
  for	
  Selec>ng	
  Board	
  Members	
  (video)
    • 	
  Crea>ng	
  Orienta>on	
  Materials	
  for	
  a	
  New	
  Board	
  Member	
  
      (video)

				
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