Should I have an advisory board?
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- Category: ESTABLISHED ENTREPRENEUR | $2M - $15M
At this stage of your business – probably. Having a team of experts on your side to vet concepts will work in your favor, if you have the right people on your side.
But you can’t pick just anyone for the job.
Select people who have specific experience in what you’re doing – The people who have been in your position before, whether that is successfully franchised or expanded to a second location. Having their experience as part of the conversation will challenge you in a constructive fashion.
Another component is having people who have the entrepreneurial experience. Starting from the ground-up is a tough road. Having fellow entrepreneurs to share experiences will prove helpful.
But, avoid picking someone based on their stance in the community, or someone who is known for their experience in the academic field. Entrepreneurs need individuals who have experienced risk with their own money and truly understand growth.
If you’re in a specific industry, look for subject matter experts. For example, if you make security mechanisms find someone who is an expert in the mechanics and nuances of these systems. These people do not need to have entrepreneurial experience, but they need to bring professional experience working with these technologies and working in these fields.
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Should I pay the advisors on my advisory board?
The short answer is yes, you should pay your board advisors. But avoid giving equity.
You want to avoid giving outright equity to these individuals because giving equity creates minority partners, and minority partners can create unnecessary problems.
Your best choice is to offer your board members payment per meeting. – Somewhere between $1,000- $4,000 per meeting.
Additionally, be sure to make expectations clear on what you’re getting in return, and what they can expect. Outlining time commitment, participation, and level of output per member in writing will help avoid unnecessary problems.
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Should I exchange services with the advisors on my advisory board?
In most cases your best bet is to pay your board advisors outright and not engage in bartering. Exchanging services can easily get sticky, and you want your relationship with your board members to be crystal clear.
You are better served paying people outright for their expertise and time.
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