Finding the Right Advisors
The premise is simple and time-honored: Two heads are better than one. First-time entrepreneur Kris Appel recognized this early on when she founded Encore Path Inc. in 2006 and launched her first product,Tailwind, which helps stroke and brain-injury survivors recover their arm movement. Her goals included licensing early-stage technology, hiring an engineering firm, raising money and manufacturing the device. Did she know how to achieve all these goals? No. So she set about finding people who did -- and surrounding herself with them.
Advisory boards can be a vital part of small-business growth. Often for no cost, board members will provide you with feedback on your business, make introductions to key contacts and even provide financing. Yet selecting members for an advisory board involves both science and art. Here are some guidelines:
- Choose people who have skills you lack. Appel selected the COO of a company that manufactured physical therapy equipment, the university vice president who used to run a state agency funding startups, a successful biotechnology entrepreneur and a university professor who is also a serial entrepreneur. The result: At no cost to her, she received introductions to investors for seed capital, referrals to engineering and manufacturing firms, and help raising $300,000 in low-cost loans from the state of Maryland, among other benefits. Similarly, when PR consultant Margaret Blohm formed a marketplace website, she added a social media expert, a communications specialist for a major corporation and a financial planner with online business expertise to her mix.
- Consider industry or geographic diversity. Patti Hill of PenmanPR looked for experts in industries she enjoyed working with most: biotechnology, economic development, energy, nanotechnology and venture funding. Teresa Clarke wanted geographic diversity -- particularly key, given the focus of Africa.com, an online portal for information about all 53 countries on the African continent.
- One size doesn't fit all needs. Villette Nolon, a serial entrepreneur in Seattle, established different boards to help launch her online resource guide to home remodeling. She broke her needs down into four specific areas: clients whose brands are represented on her website, technology executives with consumer brand experience, business service professionals, and consumers who test and assess her website.
Proceed With Caution There are some cautionary tales, though. Not all advisory board members are created equal. It can take time to see their true colors or to determine whether they truly are the right fit. Some suggestions:
- Set time limits for your advisory board members. Debbie Quintana rotates advisory board members every year so she can get exposure to and opinions of new professionals. Whether you prefer continuity or not, you should establish guidelines for meetings and preparedness. When Stacy Swift meets with her group (three times per year), the meetings are moderated by a professional facilitator.
- Drop advisory board members who lie, trick or deceive. As Cheryl Smithem of Strategic Marketing & Charleston PR notes, "work ethic, value proposition and honesty" are not open for negotiation.
- Make sure you're not looking for a "rubber stamp" team. To truly grow your business, you need to be prepared to have your assumptions challenged. Women entrepreneurs tend to surround themselves with like-minded (and like-gendered) individuals, says attorney Roman Fichman. He recommends that entrepreneurs (both male and female) "have both Mars and Venus on the team." Franchise consultant Leslie Kuban ran into this issue in her all-women peer advisory group. While all the women were business-minded with strong personalities, "put all this together in the room and the pent-up need to let their hair down and be girls came out."
- Keep business and personal separate. It can be difficult to accept "tough love" with feedback you receive from a romantic partner. Author and public speaker Toni Galardi found this out the hard way. She recommends leaving loved ones off the advisory board unless they are also intimately involved in the business.
- Amassing a roster of high-profile names can backfire if they don't contribute. When Juliette Brindak co-founded Miss O & Friends, her advisory board included some people who simply provided their names. However, investors were suspicious when they learned that these noninvolved board members didn't invest either time or money.
Finally, remember that no one knows your company better than you. While you will want to turn to and trust your advisors, don't devalue yourself or your gut instincts. As Nancy Bogart, CEO ofJordan Essentials, cautions, "Think of advice like a piece of watermelon. Eat the meat and spit out the seeds."