Guide to a Great Advisory Board


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Guide to a Great Advisory Board

  1. 1. Course ObjectiveTo provide the framework and insights toestablish and utilize an Advisory Board.
  2. 2. 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
  3. 3. What is an Advisory BoardAn Advisory Board serves an entity much like aboard of directors, with the important differencebeing no legal obligation for governance andthe attendant legal liability in the event issuesarise.
  4. 4. Advisory Boards Enhance the TeamSkills and Accountability
  5. 5. 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 industryskills, business contacts, access to capital, strategic advice,accountability, and technical help.
  6. 6. 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
  7. 7. 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 specialtyrole. For example, many medical devicecompanies have Scientific Advisory Boards.
  8. 8. How to Find Members1. Identify Key Skills the Team requires2. Draft "Job Descriptions" for Skills3. Incorporate those Skills into a Advisory Board Job Description4. Distribute the Job Description5. Create a list of Candidates6. Meet with Candidates. Passion? Admiration?
  9. 9. 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 forintroducing investors. This is a commission and can causesecurities regulation issues.
  10. 10. 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
  11. 11. 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 invery specific roles such as:TechnicalFinance (fundraising)Sales and Marketing
  12. 12. Life of an Advisory BoardGrowth Companies always have a highlyfunctional Advisory Board.The composition of the Board should changeover time so new skills are brought on board tomeet current needs and provide freshperspectives.
  13. 13. What Strengths / Skills Do You WantList:
  14. 14. Member DisqualifiersList:
  15. 15. 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
  16. 16. Sample First Meeting AgendaIntroductions: (icebreakers) ○ Top business and personal passions ○ What you hope to gain from this advisory boardAdvisory Board - Best Practices and Goals ○ Share board experiences and best practices ○ Goals and expectations for this boardCompany PresentationCompany Goals / PlansWhat was your biggest takeaway from today?Future Meetings / Communication Plan
  17. 17. 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