

Should your startup have an advisory board? - onewland
http://www.bothsidesofthetable.com/2009/10/12/should-your-startup-have-an-advisory-board/

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grellas
I have worked extensively with startups in Silicon Valley since 1984 and have
seen every shade of advisory board, ranging from those set up for pure window
dressing to those used extensively by founders for insightful continuing
advice.

The latter usually arise from pre-existing relationships between one or more
of the founders and the advisors. Normally, the advisor is someone who _wants_
to assist the founders and whom the founders accordingly want to reward by
small equity grants via the advisory director role. These types of advisory
boards, in my experience, tend to be of significant value to early-stage
startups and are well worth the small equity grants involved (which, by the
way, tend on average to be more like .1%/yr of service rather than the higher
number suggested by the author of this piece). The informal nature of the
relationship also avoids many of the hassles associated with trying to have
such an advisory board meet from time to time in some formal manner. In
essence, what you have with such boards is a healthy working relationship from
which all parties benefit.

The "window dressing" variety of advisory board is often as phony as an
undersized glass eye that spins randomly with every blink. This often involves
the so-called industry luminaries used to make the startup look much more
impressive than it really is. In essence, such advisors hire out their names
(and, yes, they will insist upon larger equity grants and often for some form
of cash compensation as well, as for example for every meeting attended).
While one can never say categorically that such advisors do not add value to a
startup, their _primary_ function is to add name-value and hence the value of
their contributions apart from name value tends to be limited. There are
exceptions but, in my experience, not many. In general, these types of
advisors are a clear mis-match for most early-stage startups, though they
often help later-stage ones needing "company profile" dressing for IPO, etc.

By the way, founders still occasionally confuse the role of advisory director
with that of a board director. There is no connection whatever between the two
roles. The former is basically an outside consultant only and has no
management-level authority; the latter, of course, has tremendous management
authority (and corresponding liability risks as well, which the advisory
director does not).

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hwijaya
Appoint them very carefully.

Understand that it feels good to have an 'advisory board' but at the end of
the day, the only person who's going to get your biz off the ground is you.

[EDIT: My own experience: most people are more than happy to give advice
without being formal advisers]

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zaidf
A fundamental question to ask is do you want the advisory board for _show off_
or to get _actual_ advice? I think there are _some_ specific cases where you
need an A-star list. But more often than not, what you really need is advice
for which you don't need to put together an official board until later in the
venture.

I like the idea of getting help from people. When/if your startup is going
somewhere, pay back for their help/advice in form of equity--as opposed to
getting an A-star list put together on day 1 which often just ends up looking
shiny but rarely useful.

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jfarmer
If the value of the name is greater than the value of the advice, skip it.

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matthewer
I feel like everyone thinks 'man you need an advisory board to be considered
real.' Most meetings with anyone investing in you they ask 'who is on your
board.' Even with all that being said, I just don't see the value. Most people
will help you along your way because they care about what you are doing. The
ones that want something from you in return, I would stay away from anyway.
Either way, like hwijaya said, its all up to you.

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edw519
There's a difference between "Advisory Board" (capitalized) and "advisory
board". The former is more for show than function. The latter is more for
function than show and will make your business appear more attractive because
it actually _is_ more attractive. Skip the first and keep the second.

When all is said and done, you will have to perform and deliver. Embrace
whatever you can to help that. If something is cosmetic and doesn't help you,
people will eventually see it for what it is.

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jrockway
Assemble an advisory board to decide.

