Getting the Most Out of Your Advisory Board

For many of the early-stage startups I’ve worked with, an advisory board has been a crucial part of their success. It’s rarely enough on it’s own to make up for a venture’s deficits, but when it’s done right it can supercharge things.

Having an advisory board is a no-brainer. Unfortunately, most startups don’t do them right. Here are a few tips for getting the most out of yours:

1. Select the right mix of members.

Advisors fit into three major categories:

  • Functional Advisors. These are people whose purpose is to provide trusted advice you can’t get on your own, prevent you from repeating others’ mistakes, or helping you avoid learning things the hard way. Their job is to pay close attention to the problems you’re having (or will have, unbeknownst to you) and help you correct for them. It’s important, therefore, to fill things out with people who will provide the expertise you lack. Think about including at least one person in each of the following categories:
    • Domain expertise in your industry or space. If you’re going into the furniture industry, find someone who ran a furniture manufacturing company for thirty years. If you’re selling books to moms, find someone who wrote a best-selling cookbook for women. If they’ve had experience they know the landscape and dynamics and players in the industry, which means they can point out pitfalls you might not see coming.
    • Functional skillsets or experience you and your team don’t have. If your team is sales-oriented but has a technical product, find someone who knows tech really well. If your team are all finance-oriented 25-year olds, include someone with 30 years of financial experience. As smart as you are, there are people who are smarter, and having them on your board shows both your wisdom and your willingness to listen.
    • Your customers. This is the most critical (and overlooked) advisory board role. Find someone whose background makes them unequivocally a customer, or someone who convincingly knows your customers intimately. If they believe in your idea enough to serve on your board, it’s a vote of confidence that you’ve got your product/market right.
  • Legitimizing Advisors. These are people whose job it is to legitimize your company  in the eyes of the world.  Anyone who joins a startup is automatically biased – you’re expected to optimize the truth when telling your story. Legitimizing Advisors serve to reinforce the fact that you’re not off in a vaccuum of your own, disconnected from reality.
  • Connecting Advisors. The purpose of this class is to open doors you can’t open for yourself, connecting you to people critical to your success. We all travel in certain social circles, but jumping between them is always tricky. If you don’t regularly sail or lunch with exactly the kinds of people you need to support your venture, finding advisors who do can be critical to your success. Even if you are naturally connected, having a formal advisor who can connect you to circles outside your own can be a huge help.
PRO TIP: Don’t invite potential investors to be advisors. At the very least, treat them as Legitimizing or Connecting advisors, and be aware that the “Dont Ask Your Advisors For Money” Rule will be in effect.  (see below)

2. Get a firm commitment.

Don’t ask all at once, but when the time is right ask specifically whether you can count someone among your formal advisors. If you ask in person, go back and get their assent in writing via email. In your ask make it clear that you’d like to tell people about their involvement (I’ve seen advisors who were leery of being publicly known to be associate with a company – these are not the kinds you’re looking for). You’re looking for a clear “yes” so there’s no misunderstanding.

PRO TIP: don’t ask your advisors for more than they are willing to give. I’ve had some potential advisors worry that they may not be able to commit enough time or effort into my company (first-time advisors often have this sincere – and worthy – concern). While you certainly want as much as they can give, it’s important to scale your asks to their availability. Don’t “require” them to do anything – make everything an “invitation.” One caveat, however: at the very minimum, any advisor should be willing to provide a glowing (but honest, of course) personal reference for your company. Even if they never come to a meeting and don’t have time for a lot of mentoring, they should feel no hesitation to speak with potential investors, clients, or employees when you need them to. If they can’t commit to that it’s probably not a good fit.

3. Publicize their presence.

If part of the purpose of your advisory board is to legitimize you in the eyes of the world, you must tell the world about them. Add their names, pictures, and most important relevant professional credential to your pitch deck, your website, and your money site profiles (Gust.com, Angellist.com, TechCrunch, etc.). By “relevant professional credential” I mean the most important thing about their background that connects them to your company. If your advisor is the CEO of a medical device company and the Commodore of the New York City Yacht Club, you probably want to emphasize the latter credential if you’re doing a yachting startup. Tweet and post too.

PRO TIP: Issue a press release for your first three advisors, and then additional releases for every new advisor you add. Remember that you’re populating the web’s content space with material about your company, so even if you don’t get much traction from any given release, it will show up when people research you down the line. Don’t bother to pay for major distribution unless your advisor is a significant public figure – the free sites are fine.

4. Engage them actively and regularly.

In the early days of a startup, having outside events to set a rhythm for your company is a really good idea: trade show participation, an investor presentation, a client deadline – these kinds of things focus the mind and light a fire under the belly. Pre-scheduling a regular (monthly or even bi-weekly) advisor call can be an excellent example. Spend some time before each call reporting on what you’ve done (and what you haven’t) in the previous period and outlining what you’ll do in the next period will give you and your advisors a sense of accomplishment and momentum – and highlight your shortcomings so you can do something about them.

Regular engagement also helps keep your company top-of-mind among your advisors, so the next time they have a random encounter that might work in your favor (“Oh, you’re interested in yachting companies? I just so happen to be advising a great one …”) they won’t have forgotten you. Whatever you do, don’t let more than a month go by without engaging your advisors as a group. Part of the reason your advisors are helping you is to meet interesting people (your other advisors), so engaging them one-on-one should be the exception, not the rule.

PRO TIP: if you hold regular calls, you don’t need to schedule them around your advisors’ schedules (which are almost guaranteed to be impossible to synchronize). If they miss one they can attend the next one. Follow-up each call with a thank-you and summary of the items discussed, so folks who couldn’t attend still get the sense of momentum you want to convey.

5. Be sure advisors always know what you need.

This is one of the most important things I see entrepreneurs forget. They spend time and effort courting an advisor and then ignore them for long periods of time so they don’t know how they might be able to help. In your regular advisor calls, make it a specific agenda item to discuss what your most immediate need happens to be (“So in terms of our critical needs, we’re in the market for a CMO with yachting experience and an introduction to a journalist who covers the sailing space. Any ideas you might have would be welcome.”). Again, you want to remain top-of-mind for your advisors, and sharpening your ask could mean that they remember you when they just happen to come across exactly what you need.

PRO TIP: Be wary of advisors who want equity (or cash!) in exchange for their participation. There’s nothing wrong with your advisors owning a piece of your company (one would hope that they would like to!), but making it a condition of their involvement means that they’re probably not doing it for the right reason. It suggests an imbalance of power and turns the relationship into one that is often analyzed in a value-for-money way (“We gave you x% of our company, but you haven’t earned it!”). I’ve seen advisors get equity for joining the board and then disappear. By the same token, option plans for advisors are even more problematic. If you’re tempted by structures like these, make them consultants instead of advisors – it’s a more honest approach. Offers of equity to your advisors during your next funding round make perfect sense as thank-yous for jobs well-done and to preserve their support and interest into the future.

6. Don’t ask your advisors for money.

This is a rookie mistake. If you’re looking for friends & family or angel money, take it for granted that your advisors know you need investment and that they’re invited to participate if they can. Couch your fundraising asks indirectly, as in “We’re opening our angel round in the next few months and we’d welcome any introductions to people you think might be interested.” At the very least, ask circuitously, as in “if any of you would like to discuss investment please let me know.” The best option is to let them approach you. Remember the old saw: if you want money, ask for advice. If you want advice, ask for money.

As important as advisory boards are, ignoring or misusing them is very common. Make sure you make the most out of yours.

Michael Sattler

With a career spent in founding and technical leadership roles with new and enterprise-level organizations, Michael Sattler is a veteran in technology strategy, operations, and product management. He’s spent decades in B2B and B2C SaaS product development, software and application design, engineering operations, new venture creation, and innovation practices.

He has scaled and managed technical teams from 2-50+ across three continents, led large-scale cross-functional program management, and founded or co-founded six companies.