DSV Consulting LLC works with companies transitioning into high growth. This could be a new company starting its initial capital raise or it could be a company that’s been around for a 100 years. One of the most important things for a company in a growth mode to have is a team with the knowledge of what lies ahead in their industry, upcoming financial position, marketing atmosphere, among other items. It’s nearly impossible for companies to have all of those on its management team or board of directors, but there is an alternative to help these companies achieve their goals – a board of advisors.
Defining the Board of Advisors
Individuals can have an informal board of advisors, which we recommend (I have had many over the years), but advisory boards are important to companies beginning a growth phase. Companies in this phase are risky, and as such, have an impossible time recruiting individuals to fill their knowledge gaps if they recruit for management, the board, or employees. Why create and populate a “board of advisors”?
- Advisors don’t have a corporate officer position, and therefore do not have any legal risk associated with corporate actions.
- Serving on a “board of advisors” can be used to enhance their own resumes, bringing entrepreneurial experience where they had none.
- Companies can provide much needed marketing and advertising exposure for their advisors – a mutual benefit! The company gets to tell their clients, employees, and investors that they have the requisite “tribal knowledge” to be successful. The advisor gets exposure.
- Advisors can parlay their advisory experience into paid positions with clients or employers that need them for the same exact position.
Are advisors paid?
For a new entrepreneurial endeavor, we recommend recruiting individuals as advisors for the “board of advisors” as part of starting a new business or new business line. We recommend recruiting individuals who will:
- take a stipend ownership in your business, less than 1% for a 3 year membership, including at least 100 hours annually;
- allow the company to include their visage and biography on the company’s website under the “About Us” page;
- include the company as either a position or a project on their LinkedIn profile;
- allow the company to announce that the advisor has come onboard through a press release; and
- attend a board meeting at least once quarterly.
Other articles
- Inc Magazine has a great article about “How to Assemble a Board of Advisers, How to set up a board of advisers to help you run your small business“
- Entrepreneur Magazine follows on with “3 Ways to Find Your Perfect Board of Advisors“
- Board Effect, a website focused on supporting board of directors, has a best practices article that opens up onto their whole website.