Why Every Startup Should Consider Creating an Advisory Board Early On

I firmly believe that a strong and effective advisory board can play an important role in the success of any startup.

Established organisations almost always benefit from having a reputable board. Regardless of the stage in which the company is situated in its development, all organisations, even emerging startups, should set up a board of advisors.

A board can guide the founders and help them make important business decisions. A board is also a meaningful signal given to outsiders such as potential investors, clients, and employees. The founders are likely to be perceived as serious, ambitious business owners supported by a strong team. This aspect is especially critical when seeking capital to grow the business. Investors, especially angels and venture capitalists, will interpret the establishment of a board as a sign of the founders’ maturity and willingness to listen to advice – a key consideration for a successful investor-entrepreneur relationship.

In their early days, companies typically don’t have enough money to hire excellent professional advisors (M&A, financiers, consultants, bankers, accountants, lawyers, tax advisors, head hunters, etc.). Startups can face difficulties attracting experienced mentors or senior advisors. Consequently, crucial elements may be overlooked.

A board of advisors provides professional guidance on multiple key business issues during the startup phase and also afterwards. Any board should include core professionals (finance, law, accounting, marketing/sales, HR) as well as industry specialists.
What makes a successful board member? How do I recruit and select board members? How should I remunerate board members? For clues to answering these questions, the links below should provide you with a good starting point.

If you still need to be convinced of the benefits of having a board of advisors, I highly suggest that you watch the video below. It is an excellent case study. Ty Danco is a former investment banker, Olympic athlete, angel investor (in the U.S. and Quebec), blogger and entrepreneur. He is highly experienced and has an intimate knowledge of startups. Ty talks about how the right advisory board not only provides insight and guidance, but can also provide the credibility needed to launch a business. I couldn’t agree more.

For more information about bank investment. Click here.

Zappos Stops Shipping to Canada

E-commerce in Canada generally sucks. The selection is crappier on the Canadian equivalent of U.S.-based stores (think: Amazon), shipping is more expensive and the overall experience is much worse than in the U.S. And now, Zappos is shutting down completely in Canada.

Go to http://canada.zappos.com and you’ll see this message:

Hey, everyone. While we often have fun things to talk about in this space, we sometimes have less pleasant topics to share.

We have made the difficult decision to shut down the canada.zappos.com site and stop shipping to Canada. One of our core values is to “deliver WOW through service”. That means the best selection of brands and products that can meet just about every individual’s needs as well as fast, free shipping and free returns, all at competitive pricing. Our Canadian customers know that we have not lived up to these service levels.
Product selection on canada.zappos.com is limited due to distribution agreements with the brands we sell in the United States. In addition, we have struggled with general uncertainty and unpredictability of delivering orders to our Canadian customers given customs and other logistics constraints.

We would like to thank our loyal Canadian customers and are sorry that we will not be able to serve you in the same way. Beginning April 1, 2011, we will no longer ship orders from canada.zappos.com. Some of you may have electronic certificates with open balances. If that is the case, please be sure to redeem them prior to April 1, 2011. Of course, as always, we will still be accepting your orders placed from Canada and shipping to US addresses on www.zappos.com. Customers can always reach us 24/7 by calling 1-800-927-7671 or emailing cs@zappos.com.

Thank you for reading this. While you may not like our decision, we hope you understand the reasons.

Zappos is a hugely successful company, and they’ve got an amazing culture and story. They’re looked upon as one of the best online companies. And it’s not necessarily their fault – distribution agreements and shipping are largely out of their control. It’s just a shame. And they’re making a business decision that must make financial success for them or at least not have a significant enough impact on them for them to try and solve the problems.

For more information about best online companies. Click here.

Naysawn Naderi, Founder of Art Sumo, Talks About Why He’s Joining Start-Up Chile

Naysawn Naderi is the sole founder of Art Sumo. Art Sumo is one of three Montreal startups joining the Start-Up Chile incubator in Santiago, Chile for 6 months. They receive $40,000 equity-free as an investment. Art Sumo is a daily deals site for handmade art from the developing world.

With the recent announcement of Art Sumo’s departure from Montreal for Start-Up Chile, I asked him to write his thoughts and share them with the NextMontreal community — and he’s done so. Thank you Naysawn, and best of luck in Chile!

A Summer in Montreal and a Winter in Santiago

Below are some thoughts on what I learned from my summer bootstrapping a company in Montreal and why I’m ultimately headed to Chile for the next 6 months to continue working on Art Sumo. My experience in Montreal has taught me that Canada is a fantastic place to bootstrap a company and really more foreigners should consider Canada as a place to start a business. I’ll be sure to come back after my stint in Chile.

Montreal – A Bootstrapper’s Friend

I came to Montreal with eyes wide open. I had been a student here and had left Montreal with the understanding that the city was a student hub and a fantastic place to enjoy life, but not the best place to run a company. Boy was I wrong.

Community: A startup community clearly exists in Montreal – rich with approximately 200 startups in town, a strong community, numerous networking events, plenty of co-working spaces, several annual conferences, multiple incubators and many investors. Coming from Seattle (where I worked at Microsoft) this was all a surprise, but I was particularly impressed by the willingness of the founders to help each other out. In my brief stint in town, I met numerous founders eager to try out Art Sumo, provide suggestions, write blog posts telling others about it, and invite me to present at their events. I found the founders to each have interesting stories with most being immigrants who speak 2-3 languages.

Investors: I attended Startup Festival Montreal in July. Hats off to Phil Telio + the other organizers for putting on quite the show and attracting top speakers to the event. I was really surprised to meet the sheer quantity of attendees with investment firm or incubator badges. Through it, I learned that there are several incubators in town, including Year One Labs and Founder Fuel, with others in Ontario and one even dedicated to Waterloo students.

Government Support: I was pleasantly surprised to learn about the amount of government support available to technology companies in Canada. In addition to offering some of the lowest business taxes in the world, the Canadian, Quebec and Montreal governments have numerous grants available to innovative Canadian companies. The grants typically cover about $10k of expenses, require a business plan to apply for, and make you jump through some bureaucratic hoops. I spoke to one entrepreneur who had managed to stack four such grants together to fund his startup, with one of the grants amounting to a $50k equity-free investment.

Further, Canada offers an amazing SR&ED credit program that can cover a significant percentage of your startup’s development costs. These credits are not limited to small companies but rather many large companies leverage the program as well. Getting the cash isn’t as simple as the process could be for a startup. While the process can be a pain it can be incredibly valuable – so much so that one startup I spoke with claimed that because of SR&ED, doing development in Canada is less expensive than outsourcing development to India.

City: Montreal itself is a fantastic city which always seems to be full of life. During the summer, the city overflows with things to do and just walking from one part of the city to another you can find a concert, a free ballet performance or meet a few friends along the way. In addition, Montrealers are a pretty friendly bunch and seem to always be eager to meet new people. This was a welcome change to the Seattle freeze to which I had become accustomed.

Foreigner Friendly: I would be remiss if I didn’t mentions the number of foreign entrepreneurs who I met who came to Canada to start companies. They each reported that Canadian immigration was much more welcoming than the American counterpart and they generally received their permanent residency within a year of applying for it.

For more information about technology companies in Canada. Click here.