Advisers: To be or not to be?
A question that often comes up is whether or not entrepreneurs should build a board of advisers for his start up. Its a tricky question. The answer is sometimes.
There are different reasons to build a board of advisers:
1. Buying credibility
2. utilizing their network
3. experienced advice
4. you think their name with get you funding
Now, these are all perfectly valid reasons but investors see through out - well at least most sophisticated ones. In general if you see famous personalities associated with a brand- run for the hills (unless it’s John Elway whose brilliant), its window dressing. (if you’re an investor)
From an entrepreneur’s perspective its all about moderation.
Boards are cool but they usually don’t add value and names usually don’t buy funding. You (founder) buys half the credibility and the other half comes from the idea, pretty much end of story.
However if you have someone on board who will actually make capital intros then sure, its cool. But there’s a big difference between someone who will be proactive and put their stamp on it then someone who will just say ok, use my name. Experienced advice is generally crap. Your asking people that are too busy for their own affairs to help you out. Maybe you’ll get 5 minutes. If you can’t succeed on your own, you shouldn’t be taking other peoples money (or maybe you should - to save your own ass)
My attitude is anyone who volunteers advice, ideas, help without asking for someone and whose advice is useful, you should ask to be on your board. That is the kind of person who would likely stand behind you and make introductions and not just sit idle and bullshit.
Is a big board a good idea = NO. Keep it small with people that are actually productive - with the exception if you’re pitching for political related business (then stock up on people you can buy).
if you try to buy credibility it doesn’t get that far. I know plenty of entrepreneurs with awesome track records (the kind of people other people put on their boards) that can’t raise funding for ideas = because they weren’t sellable ideas. Only give equity to people who offer help and you can trust.
****Bottom line is this: Advisers are good, but keep it simple and only invite people that proactively offer help.
- it also validates your idea.
