When growing a business, one of the most valuable assets a CEO should build and leverage is a strong board of directors. In a recent article on ReadWrite, Scott Gerber, founder of the Young Entrepreneur Council, aggregated 12 tips entrepreneurs believe are most important when creating a startups’ board of advisors. We list them below and comment on a few.
- Vest their equity over time: This will allow for an easier separation of the board+company relationship doesn’t work out.
- Bring them in by the boatload: The larger the advisory network a startup has to draw from in the beginning, the better. This group is less formal than the board of directors. In the early stages, a startup has so many obstacles in overcome. Most of the folks in the advisory network bring a special skill to the table. Understand everyone’s strengths and then use them.
- Be selective: The optimal size of a board is 5-7 people. Decisions need to be made efficiently at a startup. Those who have a significant equity share need to bring value to the company.
- Seek counsel, not advice: You should always try to surround yourself with people who have more experience or are more knowledgeable than you are. We’ve written about this here.
- Build a Fortune 500 board: If you want to build a Fortune 500 company, start with a Fortune 500 board. A company’s board adds credibility to the company.
- Listen and reward them
- Take your time: Don’t rush to build a board.
- Bring different perspectives into the mix: You always want to avoid groupthink. Consider all aspects of your business and find people with those strengths.
- Look for passion and availability
- Have skin in the game
- Seek specifics: Aspire to build a dream team.
- Be respectful: Make the most and respect the time you have your board together. Not all decisions are board-level decisions.