Building a Board of Advisors Andy Forbes

What is a BOA? An advisory board is designed to provide independent advice and counsel to the owner / CEO / management team, independent of the fiduciary responsibilities and D&O costs associated with a board of directors

An advisory board is designed to provide independent advice and counsel to the owner / CEO / management team, independent of the fiduciary responsibilities and D&O costs associated with a board of directors

Why a BOA? Augments in-house experience and expertise Enhanced corporate self-discipline and accountability Objective opinions Strategic planning and counsel Honesty

Augments in-house experience and expertise

Enhanced corporate self-discipline and accountability

Objective opinions

Strategic planning and counsel

Honesty

What does a BOA do? Make key introductions Help establish corporate objectives and policies Enhance CEO and senior management effectiveness Act as arbitrator Act during a crisis Lend credibility Plan strategy development

Make key introductions

Help establish corporate objectives and policies

Enhance CEO and senior management effectiveness

Act as arbitrator

Act during a crisis

Lend credibility

Plan strategy development

Care and feeding of a BOA Keep the board informed Give the board time to prepare Sharing significant information builds trust Set the long-range agenda Motivate members Listen, don’t argue

Keep the board informed

Give the board time to prepare

Sharing significant information builds trust

Set the long-range agenda

Motivate members

Listen, don’t argue

Advisor types Wow! S/he is on your BOA? Friend / business acquaintance Free doughnuts

Wow! S/he is on your BOA?

Friend / business acquaintance

Free doughnuts

Timing of a BOA Pre Series A only if it helps your fund raising Series A / B keep it four to seven people Mezzanine go for it!

Pre Series A only if it helps your fund raising

Series A / B keep it four to seven people

Mezzanine go for it!

BOA Compensation Pre Series A / B Nothing Expenses Options Post Series A / B Per meeting fee Retainer Options

Pre Series A / B

Nothing

Expenses

Options

Post Series A / B

Per meeting fee

Retainer

Options

BOA failures Incompatible or disruptive personalities Too many cooks Insufficient compensation CEO

Incompatible or disruptive personalities

Too many cooks

Insufficient compensation

CEO

Recap Stay informal for as long as possible If you do it, do it right You get what you pay for Avoid “Free Doughnut Man” Andrew Forbes [email_address]

Stay informal for as long as possible

If you do it, do it right

You get what you pay for

Avoid “Free Doughnut Man”