Course Objective

To provide the framework and insights to establish and utilize an Advisory Board.

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

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.

Advisory Boards Enhance the Team Skills and Accountability

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.

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

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.

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?

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.

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

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

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.

What Strengths / Skills Do You Want

List:

Member Disqualifiers

List:

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

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

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