Welcome (a)Board: Advisors 101

by Yvonne English 

If you’re like most entrepreneurs, I probably don’t need to convince you that you need good advisors in order to reach your potential. The problem is that most entrepreneurs have no idea how to find that elusive figure: the perfect advisor.

Step One: Identify the Type of Advisor Needed

Identify your needs. Are you looking…

(a) To fill a position on your advisory board
(b) For a mentor
(c) To fill a seat on your corporate board
(d) Wait…there are different types of advisors?!?

If you picked (a)-(c), then move on to Step Two. For (d), read on.

• Advisory Board (Member): An informal advisory board can fill knowledge gaps and serve as a sounding board for you as you grow your business. You’ll need to identify the areas of knowledge and experience that your organization is missing. For instance, if you have a retail product that you’d like to expand to the mass market, you may want to add someone who has experience with selling to larger stores and chains. Once you decide what roles to fill, you’re ready to start your search. The nice thing about an advisory board is that you can take or leave their advice.

• Board of Directors (Member): A corporate board is a more formal entity. There are legal documents that need to be drafted in order to create this governing body. While the benefit of this formality is having a team in place with more “skin in the game”, be aware that you can’t ignore the advice of this type of board – they have voting rights. If you’re looking to grow your board of directors, the process is dictated by those aforementioned legal documents.

• Mentor: A mentor is an individual who may or may not serve on the company advisory board. Whether or not that is the case, a mentor fills the role of “coach” by asking probing questions and listening carefully to your responses. A good mentor doesn’t necessarily tell you what to do…she or he helps you to figure it out for yourself. Mentors can either be people who help you in a general sense or in specific areas such as spirituality, fitness, volunteerism…you name it!

Step Two: Find Your Match

When you’re thinking about the specific traits of your perfect advisor, remember that diversity is important if you’re looking to add to an advisory or corporate board. You want to have a collection of individuals with different skills and experience. It also helps to have different backgrounds, ethnicities, ages, and both male and female perspectives represented. The level of diversity that you’ll want to achieve will depend on the nature of your business and goals.

Once you have an idea of traits, background, and experience to target, create a “job description” – just like you’re hiring to fill a position in your company. Don’t worry about defining benefits and compensation yet. (We’ll address that in Step Three.) Then, you need to get the word out that you’re looking for a new advisor. This is where the written job description will come in handy. Use all of the marketing tools at your disposal.

• Blast it out to your company email list – someone who already knows your company might be the perfect fit!

• Do an Advanced LinkedIn Search using relevant keywords to see if you are already connected to any potential advisor candidates. If you find candidates that are 2nd or 3rd degree connections, ask your 1st degree connections to introduce you.

• Tweet out a link to your advisor job description.

• Reach out to local organizations such as SCORE, the SBDC, business incubators, accelerators, and colleges and universities. Individuals who are looking for new projects often reach out to these organizations first.

• Send an email to your contact list asking for their help in your search.

• Reach out to your alma mater. Alumni offices often keep lists of alums who have indicated that they would be willing to mentor or advise graduates from the institution.

• Post news of your search on Facebook.

• Attend networking events and get the word out!

Step Three: DTR (Define the Relationship)

This is the most crucial (and most often forgotten) step of the process. You need to do three things as you’re defining the relationship with your advisor.

1. Define Compensation. You need to determine whether/how you will be compensating the individual. If it’s a formal board position, this is in the legal documentation. Otherwise, you’ll need to agree upon what’s fair with regard to compensation. This could be cash, equity, in-kind services, free products and services, etc. Ask your candidate what he or she expects in return for filling the role. Some individuals may volunteer their time and services while others will expect some form of compensation.

2. Manage Expectations.  You’ll need to agree upon the responsibilities and time commitment (weekly? monthly?). You’ll also need to discuss how long you expect the advisor relationship to last – one year, three years, forever?

3. Paper It. A formal written agreement of all of the points discussed above helps to alleviate confusion in the future. The Founder Institute has this handy template that you can customize for your situation.

Step Four: Sail Into the Sunset

Always remember to show appreciation for your advisors, and don’t forget to pay it forward! Someone out there might need your advice someday!