3 Reasons Why an Advisory Board Can Boost Startup Success
Many new entrepreneurs find themselves struggling as they launch and attempt to sustain their fledgling companies. Global e-signature and digital transaction management leader DocuSign is one of the many successful companies that have found an advisory board to be among their most powerful assets in the process of taking their companies to scale.
Starting your own company represents your first steps along what will likely be a long and challenging path. You’ll be called on to learn new skill sets, sometimes daily. And you’ll be responsible for putting the company’s mission, goals, and vision into place, as well as for hiring, firing, strategy, contract negotiation, and a wide range of other responsibilities. Having advisory board members who have proven track records of success can go a long way toward making your life easier.
When you start an advisory board, you won’t need to relinquish ownership of your company; you are simply adding on the expertise and experiential knowledge of a group of people committed to helping you win. The names of the board members, no matter how prominent, aren’t the asset that will drive forward the most positive changes in your company; instead, their knowledge, commitment, and mentorship are.
Some experts have commented that advisory board members are less useful in terms of giving validation to a company by lending their names to a roster. That kind of public approbation from respected figures in your field may feel wonderful, and a strong recommendation can sometimes even open new doors. But the true value of an advisory board lies in saving you potentially exponential amounts of time and money as its members help you solve problems that might have taken you much longer to work out by yourself.
Here are a few of the major ways in which an advisory board can help your company:
1. Knowledge — Carefully chosen members of an advisory board can supply a depth and breadth of subject matter expertise that a start-up’s founder and executive team may lack. For example, if you have no previous background in finance, you will want an exceptional CFO on your advisory team. If you have pinpointed that your personal weakness is in communications, make sure to bring an experienced public relations professional onto your advisory board.
And don’t neglect to ask a CEO whose track record you admire to join your board as well. One proven business leader to advise you on specifically CEO-related matters can make a major difference in your own leadership development.
Bear in mind the fact that even the most savvy and knowledgeable advisor will still not be working beside you in the trenches every day, and won’t have the intimate perspective on your business that you and your own team will bring. In many cases, an advisory board member can learn as much from the staff of a start-up as the staff will learn from him or her.
2. Experience — Advisory board members can offer years of experience, helping you to spot and solve problems early on. They can assist you in strategizing your way through issues that you might not yet have the skills to analyze. Their more extensive backgrounds can provide you with much-needed wider perspectives that affect your day-to-day operations. And they can foresee trends in the making and point you in new and useful directions that may not have occurred to you.
3. Networking — Members of advisory boards come into contact with people from a wide range of industries and perspectives, at the global level. These contacts can be another valuable tool for your growing business.
Just make sure that your advisors can commit the amount of time and effort you need from them, and that they are willing to share contacts within their networks for your benefit. Even a very successful and well-connected individual who doesn’t have the time won’t be able to help as a member of your advisory team.
And remember that you don’t have to continue a relationship with an advisor or mentor indefinitely. Set up a timetable designating when you will sit down together to meet and evaluate the relationship. If it’s not working out, find a graceful way to conclude an advisor’s service on your board.
You will also need to create a plan outlining how your advisory board members will participate in your company: Will they have voting rights? To what degree will their opinions affect your ultimate financial and operational decisions? Look at other companies similar to yours to get an idea of the kinds of organizational structures they have found successful.