Some tips on forming an advisory board that assume you are currently bootstrapping and will be soliciting advice and feedback from a variety of sources: friends, former co-workers, other entrepreneurs, customers, and partners.
Forming an Advisory Board
Rich Weber of Semifore is fond of saying, “it takes a village to make a startup” and he is absolutely correct in our experience. Part of trick to “finding your village” is get into the habit of regularly presenting plans and results to at least kitchen cabinet from day one. You can invite small groups four to six friends, former co-workers, other entrepreneurs to an lunch or dinner to present briefly on a challenge you are wrestling with in your business and solicit their feedback and advice. You can include customers and partners when it may be appropriate.
Half of the value is in the preparation that you and your team make in advance of the meeting: the act of organizing your thoughts about the situation and getting the team more or less on the same page about challenges, constraints, and options is at least half the value. Don’t push for a consensus in the meeting, it’s OK that people may strongly disagree, your goal is to get a variety of perspectives on the table including perhaps some you had not considered.
An Advisory Board Can Start as An Informal set of Advisors
An advisory board is different from a formal board of directors that is created as you take on outside funding (or prepare to take on outside funding). They may be friends, unpaid advisors, or consultants who advice you value and whose expertise and experience typically fills a blind spot in your current founding or executive team. For stock compensation, options or restricted stock in the range of 1/10 of one percent to one percent of the common pool is a commonly accepted range, you can go higher for an exceptional advisor. Advisory boards may meet monthly, or one or twice a quarter.
The preparation the startup team goes through to present results and plans for next time period is key to making advisory boards effective, as is regular–every two to six weeks depending upon the speed of unfolding events–email communication on status.
Related Blog Posts
- “Unfamiliar Pain”
If you don’t have a kitchen cabinet or board of advisers that you are accountable to, I would encourage you to create some mechanism for independent outside advice from folks with relevant experience. I have several other independent consultants that I compare notes with, we also take turns
kicking each other in the assencouraging each other to make hard decisions and do the things we know we need to do that are getting neglected. We having a meeting with all of our partners together for the first time in early December. I hope to use this as both a joint planning and joint accountability mechanism.
- Common Questions About Advisory Boards
- Making Effective Use Of Your Advisory Board
- George Grellas on “Insightful vs. Window Dressing Advisory Boards”
VentureHacks has three relevant posts that are more focused on VC related issues than bootstrapping but still worth reviewing: