While the management team for the company is the one holding the steering wheel for the business, the strategic advisors can either be a GPS navigator guiding the business turn by turn or a sleeping passenger who is only along for the ride. One must determine the strength of the advisory board based upon several elements; board experience, key strategic relationships, compensation, and other crucial doors that this group of individuals can help open. It’s hard to have overwhelming faith in a board carrying the definitive responsibility for the success or failure of a business, it just doesn’t seem to work out that way in the real world. What one should look for is a strong and sensible advisory team who will represent shareholders with smart insights, impeccable integrity, and overall a strategic vision for where the company needs to go to be successful. The compensation structure of board members should also be taken into consideration, as well as the frequency of involvement. Board members should also serve as references for the management team’s experience and abilities. To truly maximize the helpfulness of strategic advisors, both the entrepreneur and the board should be focused, respectful of each other’s time, and share a similar passion for results.
When looking at a new venture the Advisory board is certainly a point of interest from an investor’s perspective. Are there advisors for the venture? If so, are they well-connected, and have a personal interest in the venture’s success? How important are advisors to the success of a business? Before one fills up a business plan with high-profile names that look good on paper, they should make sure those advisors bring value in the flesh by functioning as proactive contributors around a conference table.
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