Selecting Your First Board of Advisors - Entrepreneurship 101
Board of Advisors
-
Upload
masschallenge -
Category
Documents
-
view
232 -
download
0
Transcript of Board of Advisors
![Page 1: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/1.jpg)
Setting Up an Advisory Board
Alec P. Karys
Genesis: Consulting for Startups & Emerging Companies
508-333-6619
This work is licensed under the Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 Unported License. To view a copy of this license, visit http://creativecommons.org/licenses/by-nc-nd/3.0/ or send a letter to
Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
![Page 2: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/2.jpg)
Alec P. Karys 2
Goals for Advisory Boards
Establish credibility by association Networking & connections from Board
members Review & input on company’s strategy Feedback on company’s products or services Feedback on technology product/roadmap Sounding board for management
![Page 3: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/3.jpg)
Alec P. Karys 3
Types of Advisory Boards
Customer– Help with product development, marketing &
sales Strategic
– Help with strategy, company development & strategic alliances
Technology – Help with technology/product road map
![Page 4: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/4.jpg)
Alec P. Karys
4
Member Obligations Public relations
– Allow association to be publicized (Web site, pr campaign)– Willing to talk to press
Attend meetings & participate Respond to phone calls & emails Respect company’s confidentiality & non-compete
issues Help recruit other members Provide strategic & networking help Provide feedback on product or service
![Page 5: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/5.jpg)
Alec P. Karys 5
Benefits to Members
Ringside seat at entrepreneurial, high growth firm
Ringside seat at “bleeding” edge Networking & interaction with other members Ability to influence company & industry Chance to be associated with success Potential financial benefit from shares
![Page 6: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/6.jpg)
Alec P. Karys 6
Company’s Obligations
Protect member’s time Protect member’s confidentiality (contact
info) & reputation Make meetings & interactions interesting,
stimulating & rewarding Provide inside look at company’s strategy
& products
![Page 7: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/7.jpg)
Alec P. Karys 7
Benefits to Company Provides unbiased outside perspective Increased credibility with investors, vendors, customers Strategic planning assistance and input Enhanced CEO and management effectiveness Sounding board for new ideas Advice around common start up “pitfalls” Adds “ cache” to company Introductions to potential investors Partnering, joint ventures Advice on IP, Trademarks, Copyrights
![Page 8: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/8.jpg)
Alec P. Karys 8
Board Composition
Membership – 2 to 8– More than 8 hard to manage– Plan on at least 3 not attending meetings - need
about 8 to get attendance of 5– Get mix of expertise/experience/industry
Chairman– Helps with agenda & scheduling meetings– Gets additional shares as compensation
![Page 9: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/9.jpg)
Alec P. Karys 9
Member Qualifications Industry experience Startup experience Advisor experience Research/Academia experience Subject matter expertise (engineering, marketing, finance,
etc.) Time available Willingness to work for company No conflicts Chemistry with founders/principals Name value
![Page 10: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/10.jpg)
Alec P. Karys 10
Recruiting Members Founder’s contacts Investor’s contacts Cold calls Consider prospect’s geographic location (impact
travel costs) Look for successful entrepreneurs who may have
time available Look for diverse disciplines Avoid friends, family members, professional
advisors
![Page 11: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/11.jpg)
Alec P. Karys 11
Term
One-year renewable Co-terminus with other members
![Page 12: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/12.jpg)
Alec P. Karys 12
Compensation
No cash compensation Pick up expenses involved in attending
meetings (travel) Stock options
– Vest in one year– Additional options for service beyond one year– Total for board = .5% - 1.0% of shares
outstanding
![Page 13: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/13.jpg)
Alec P. Karys 13
Letter of Agreement
Outlines mutual expectations & responsibilities
Lists terms & conditions Accompanied by non-disclosure/non-
compete agreement
![Page 14: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/14.jpg)
Alec P. Karys 14
Advisory Board Management
Founders/CEO must be involved VP of Marketing can manage day-to-day
functions – especially for customer boards Consider once a year joint meeting of
Board of Directors & Board of Advisors Be wary of spending too much time
![Page 15: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/15.jpg)
Alec P. Karys 15
Meetings In person
– Expensive, time-consuming, requires pre & post meeting work
– Most valuable to members & to company– 1 to 3 times per year; 2x per year optimal
Virtual– Use Web technology– Saves on T & E– Easier to schedule– Save transcripts
![Page 16: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/16.jpg)
Alec P. Karys 16
In Person Meetings Place
– Off site – away from distractions – hotel meeting room Time
– ½ day +; less not worthwhile for travel time & cost; more may be hard to schedule
Schedule a years meetings in advance Pre-meeting dinner –night before for social agenda Agenda
– Develop with Chairman, member input– Get input from management team– Clear objectives & deliverables
![Page 17: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/17.jpg)
Alec P. Karys 17
In Person meetings (cont)
Member preparation– Review agenda– Homework assignment
Make interactive – minimize presentations, maximize feedback, discussion, interaction
Use company scribe to take notes
![Page 18: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/18.jpg)
Alec P. Karys 18
Virtual meetings
Time should be shorter than in-person (2+ hours)
Make sure technology works beforehand! Dry run with staff to debug process
![Page 19: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/19.jpg)
Alec P. Karys 19
Post meeting follow-up
Thank you notes/emails/call Reimburse T & E expenses Send out meeting notes & action items Confirm schedule for next meetings Touch base with those who did not attend
![Page 20: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/20.jpg)
Alec P. Karys 20
Public Relations Post board bios on Web site Include their email & links to their Web sites if
they wish Be careful to not imply that their employer is
endorsing the company PR should focus on the Board in toto, not on
individuals Prepare board members for press & investor
questions
![Page 21: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/21.jpg)
Alec P. Karys 21
BOD vs BOA;Major Differences
BOD– Provide fiscal accountability– Govern the organization– Legally accountable– Fiduciary responsibilities
BOA– No formal power, or binding legal authority– Serve at the pleasure of the business or the CEO– Provides support, advice and assistance
![Page 22: Board of Advisors](https://reader033.fdocuments.us/reader033/viewer/2022052310/55264d44550346d36e8b4cd7/html5/thumbnails/22.jpg)
Alec P. Karys22
Q&A