How to Build an Advisory Board
Brian Garrett, co-founder of CrossCut Ventures (http://www.crosscutventures.com) explains how to put an advisory board together. These tips will help you select the right members to create an efficient and compatible board.
- Choose individuals whose backgrounds help make your idea more viable
- Select board members with varied backgrounds & expertise
- Select individuals who will be actively involved in the business
- An advisory board should provide guidance & access to the industry
When an entrepreneur is thinking about building an advisory board, they need to think about a couple factors. Why are they building? What’s the purpose of an advisory board?
Well in my opinion, the advisory board is there as a sounding board for management. They’re supposed to have expertise that helps you understand the trials and tribulations you’re going to face as an entrepreneur and give you guidance along the way. They’re also supposed to help you with relationships and helping you meet the types of people you need to meet as you think about building your business.
So there are three things that I sort of think about when I ‘m trying to piece together an advisory board.
The first is select people that validate the opportunity and market you’re pursuing and this is often done before you’re raising capital. You want to find some people whose names and pedigrees raise the eyebrows of the venture capitalist that you’re trying to attract. And so if they see a success or an IPO on a resume on one of your board members, that brings validation to the opportunity that you’re pursuing regardless of whether it’s a good idea or not. So having great people around you that validate the opportunity is important process to think through when you’re building your advisory board.
The second aspect is building an advisory board that has blended disciplines and what I mean by that is that you want some people with a tech background. You want some people with marketing sales business development execution side. You want operational expertise if you’re in a commerce business understanding how to do the fulfillment pick pack ship. You want to bring blended disciplines to the advisory board because you want someone that is your go-to person when you face that problem in your own business. So how do I scale tech? Go to my tech advisory board member who understands that aspect of the business.
And then the third thing is that I believe that advisory boards need to be manage like an employee so the days of giving away equity simply for the use of their name or for the credibility that they bring. You can bring a couple people on with that mindset but at the end of the day, my philosophy is set deliverables for these advisory board members and tie the vesting of their equity grant to those deliverables and then manage them like an employee. Have regular meet-ups where you basically check in and say, “I’ve asked you do X Y Z, have you done it?”
And if you can manage that board and select a group that has these blended disciplines that are validating to your idea, it’s almost like building yourself a super experienced employee base that’s working to help you build this business.
And if you can pull that together effectively, I’ve seen it significantly affect the trajectory of these young companies because they get into situations and partnership opportunities they would have never seen had they not brought that sort of expertise in domain experience around the company.