As a startup, you need to make the right decisions to survive. But instead of second-guessing yourself, why not get some senior external people to help you with that? Sure, you can get some mentor(s) that you find yourself or get through your accelerator. But why not get these all together in your personal support team, and group them in a startup advisory board?
Below are three key reasons why your startup needs an advisory board.
Advisory board members complement skills that are lacking in your company now. Face it, life at a startup is hard and you need to make choices on which profiles you hire first. Advisors are typically the profiles you want to join your startup, but you can’t afford. Advisory board members can fill in the gaps and help you grow up to the point where you can start hiring the right profiles to complement your team.
Advisory board members can help you find money, either in the form or investors or customers introductions. They are usually well connected and/or experienced and can help you identify the right sources of capital and assist you with your fundraising efforts. They usually also have a link with the industry you are targeting and can make customer introductions.
3. The Truth
Advisory board members should always tell you the truth. They’re not your 4Fs (friends, family, fools, and fans) who will support you no matter what. They will be brutally honest because they have aligned themselves with your startup. It’s their reputation on the line if you fail.
Be careful only relying on investors for advice. Investors surely are capable and experienced people, but they aren’t independent. Independent advice is crucial to challenge existing and new perspectives, but also in cases of conflict and building new relations. By definition, board members have the company’s best interests at heart, but all too often, investors are focused on ROI.
PS: Don’t take our word for it. The BDC from Canada also conducted a ten-year study from 2001 to 2011, finding that annual sales of businesses with advisory boards were 24% higher than those of the control group. 80% of the business leaders with advisory boards that they interviewed, said that if they had to do it again, they would set up another advisory board. Click here for the complete report.