Every entrepreneur should have an advisory board–a small group of people whom you can reach out to whenever you make a major decision. You should be investing in people whose advice you can trust. Most people pick their board members by default. Meaning, certain people have always been around and they automatically become the ones that they talk to. But there should be as much thought toward selecting your personal board as you would in selecting a board of directors if you were a corporation.
[Related: Why Every Entrepreneur Needs A Personal Board of Directors]
BlackEnterprise.com reached out to members of Young Entrepreneur Council (YEC);Â an invite-only organization comprised of the world’s most promising young entrepreneurs. In partnership with Citi, YEC recently launched BusinessCollective, a free, virtual mentorship program that helps millions of entrepreneurs start and grow businesses. BE asked them how best can an entrepreneur identify and get people to sign on as advisory board members? Here’s what they had to say.
1. Determine the Goals of Your Advisory Board First. Once you’ve determined the goals of your advisory board, select individuals who will be valuable to the board and passionate about the project based on their experience. Introduce your candidates to the idea and if you’ve chosen wisely, they should express interest and may even request to be a member of the board.
2. Look for Passion and Previous Experience. Look for someone who is experienced and an expert in the same industry with strong connections and industry knowledge. They should be passionate about your idea and willing to put in their own cash for success. This experience and knowledge can help guide you in the right direction and avoid costly mistakes.
— Parveen Panwar, Vidaptiv Inc / PMI 5 Media
3. Look for People Interested in Equity. The best advisory board members have more opportunities than they have time to fit into their busy schedules. If you want to land a rockstar advisory board member you may need to offer them
0.1 to 1.0% of your company’s equity, on a two-year vesting schedule, depending on how big of a household name or expert they are and the amount of time and resources they are willing to commit to your company.— Doug Bend, Bend Law Group, PC
4. Ask the First Person You’d Want to Test Your Idea With. Whomever that is, they are a great place to start. Asking someone to be an advisor should be the second step — the first, is getting a meeting to just “gut check” what you are doing and get their candid feedback. Once they’re bought into the idea, you’ll find they’ll be more interested in getting involved.
— Tammy Leigh Kahn, MarketMeSuite (Acquired) / Constant Contact
5. Target Work Horses, Not Fancy Titles. The most common mistake I see new entrepreneurs make when putting together an advisory board is shooting for the moon. I’m all for being ambitious, but the reality is you’ll get much more help from people who’ll commit to meeting with you regularly, and will roll up their sleeves when necessary. Choose advisors who have a strong bias for action.
6. Determine Whether They’ve Been on an Advisory Board Before. You want someone who understands the role of an advisory board and who has been through it before. Often, a first-time advisor doesn’t understand the nature of how they can best help. As a result, they may end up being unhelpful or potentially give harmful advice. Talk to the founders of companies they have advised for in the past to get a good sense of how helpful they’ve actually been.
7. Identify Your Own Weaknesses. Figure out your business’ weaknesses and make sure that the advisors you select have both experience and can provide true value. Once you’ve identified these individuals, depending on the circumstances, you could consider providing equity, cash or benefits. We went the equity route and it’s worked out well for us. Each situation is different, so see what works best for your business.
— Hesam Meshkat, Guzu
8. Identify Based on Diversity of Skill Set. The key to forming an outstanding advisory board is to understand the value of the board is only as valuable as the diversity of skills of its board members. You should have an advisory board that can offer critical skills, such as finance and marketing. In addition, depending on your goals, you’ll want to have one or more members who have experience building (and selling) large businesses.
9. Recruit Proven Passion. You have a great idea and passion to pursue it. Now you need to find advisors. Start with people who have already “made it” in your vertical: those leaders possess the knowledge that you need, and experience that will add the most value to your company. Ask for help and you’ll find out quickly which people are worth a spot on the board.