I firmly believe that a strong and effective advisory board can play an important role in the success of any startup.
Established organizations almost always benefit from having a reputable board. Regardless of the stage in which the company is situated in its development, all organizations, 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.
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