Download - Guide to a Great Advisory Board
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Course Objective
To provide the framework and insights to establish and utilize an Advisory Board.
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Key Learning Outcomes
● Understand the importance of utilizing an Advisory Board in a financial transaction
● Define the right Advisory Board members● Delegating tasks to Advisory Board
members● How to incorporate accountability with the
Advisory Board● Quantify support mechanisms of the
Advisory Board
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What is an Advisory Board
An Advisory Board serves an entity much like a board of directors, with the important difference being no legal obligation for governance and the attendant legal liability in the event issues arise.
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Advisory Boards Enhance the Team Skills and Accountability
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Why Have an Advisory Board?
● Fill Strengths of the Team● Leverage Core Competencies● Broader Points of Connection● Accountability Mechanism● Sounding Board / Stop GateAn advisory board is a cost-effective source of industry skills, business contacts, access to capital, strategic advice, accountability, and technical help.
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Advisory Board Team
● At least 3 Members● Key Strengths:
○ Sales and Marketing○ Finance○ Technical○ Strategy○ Operations○ Legal and Human Resources
● Passionate about the Purpose and Vision● Is an Advocate for the Company
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Who Needs an Advisory Board?
Every entity should have an advisory board.
If a company has a formal board of directors, then an advisory board can play a specialty role. For example, many medical device companies have Scientific Advisory Boards.
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How to Find Members
1. Identify Key Skills the Team requires2. Draft "Job Descriptions" for Skills 3. Incorporate those Skills into a Advisory
Board Job Description4. Distribute the Job Description5. Create a list of Candidates 6. Meet with Candidates. Passion? Admiration?
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Compensating Members
● First Four Meetings: Cash Compensation that is within your budget
● Get to know each other during these meetings and make sure it is the right fit
● Equity participation (if available) is the most logical for all parties long-term.
Note: DO NOT give rewards-based compensation for introducing investors. This is a commission and can cause securities regulation issues.
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An Advisory Board
● Meets every 1 to 3 Months ● Meeting are 2 to 5 Hours● Maintains Communication Between
Meetings● Is a Highly Functioning Working Group
○ Superior Communications○ Transparent with everything○ Respects viewpoints○ Makes decisions quickly
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Expectations of an Advisory Board
● Learn the Vision and Mission of the Entity● Actively Assist the Entity to Achieve its
Goals● Speak Positively about the Entity and its
Founders / Executives in Public● Constructive CriticismAdvisory Boards will provide the most value in very specific roles such as: TechnicalFinance (fundraising) Sales and Marketing
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Life of an Advisory Board
Growth Companies always have a highly functional Advisory Board.
The composition of the Board should change over time so new skills are brought on board to meet current needs and provide fresh perspectives.
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What Strengths / Skills Do You Want
List:
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Member Disqualifiers
List:
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Build your List, Recruit, Complete
● Create a list of 10+ Candidates ● Provide them with the Job Description● Have 1:1 Meetings● Write 2-3 things next to each Person of what
they would do to fulfill this role● Select 5. Contact Candidates / Extend Offer● Goal is to get at least 3 to commit
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Sample First Meeting Agenda
Introductions: (icebreakers)○ Top business and personal passions○ What you hope to gain from this advisory board
Advisory Board - Best Practices and Goals○ Share board experiences and best practices○ Goals and expectations for this board
Company Presentation Company Goals / PlansWhat was your biggest takeaway from today?Future Meetings / Communication Plan
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Action Plan
● Inventory of Capabilities of Current Team● Identify Gaps● Establish Compensation● Document Job Description and Define Roles● Recruit. Have Candidates Commit by
Signing the Advisory Board Job Description.● Schedule the First Meeting● Assemble and Distribute Agenda● First Meeting - Establish Team Rapport● Schedule Future Meetings