In a competitive landscape, such as the alternative protein industry, emerging startups need to pull out all the stops and offer both superior products and a great customer experience compared to their competitors to stand out. Achieving these high standards requires significant expertise in a broad range of areas – this is where a strong advisory board is crucial.
Advisory boards are an often under-discussed element of startup companies that can have a major impact on the success of a company. These boards are often made up of industry experts, strategic partners, and key investors. They play a role in offering guidance in strategy, spending, growth and other areas of operations to fill in gaps in leadership’s knowledge.
These advisory board members are different from mentors or consultants, while they are generally considered to be a part of the startup they don’t function the same way as employees. Generally, advisory boards don’t meet together on a regular basis, if at all. They also do not have any legal responsibilities and they’re not bound to the same fiduciary duties as regular board members.
Rather, advisory board members consult with founders, board members and executives on an as-needed basis to address specific challenges a startup is facing, or regularly to develop documents such as an annual strategy plan, or at the time of new product launches.
Generally, board members write up agreements for advisory board members that outline their roles and expectations. The advisory board members are typically compensated with equity in the company.
Advisory boards offer a range of benefits for new and growth-stage startups. They are an effective means of building credibility as they serve as evidence that established industry experts believe in what the startup is doing. Further, advisory board members can offer invaluable advice, supported by their own experience in the industry which can open doors for the startup and create connections to other leaders in the space.
Advisory board members can even serve as a feeder group when developing a board of directors. When you recruit board members from your advisory board, you can spend less time making them acquainted with the business and pending concerns. While forming the board of directors should be treated as a long-term project, the increased flexibility of an advisory board means this can be formed relatively quickly and changed if needed.
When forming an advisory board keep the following in mind.
- Your mission is your north star; clearly define your company’s mission and set your intentions so you can present them to potential advisory board members.
- Use your network; consult your professional network when selecting members for your advisory board – you can draw from this network directly or ask your connections for recommendations on who may be a good fit for these positions.
- Diversity is key; seek advisors with a variety of areas of expertise, this combination of experts can give you greater insight into specific elements of the business that may require improvement be it operations, technical/scientific, marketing, strategy, or finance.
- Keep it small; communication is often more effective in small groups, a board with fewer members that has a lot of expertise in their respective fields can work effectively by offering advice and a plethora of information and perspectives in different areas of running a business.
These advisory boards can offer a wealth of knowledge to startups and often offer highly effective solutions to otherwise time-consuming problems. While the formation of these may be an overlooked step for busy founders, the rewards of forming and maintaining effective advisory boards can pay off throughout the startup’s lifetime.