When looking for advisors consider the following:
- Size Matters. Most advisory boards have three to five members. Any less, and you won’t have a diversity of opinions and skills; any more, and you’ll face the “too many cooks in the kitchen” problem.
- Where to Find Them. You can find advisors from all walks of your life. They can be friends, professional colleagues or those in your network or your industry.
- Find Skills That Complement Yours. When looking for advisors, try to find people with skills that are complementary to yours. If you’ve got a lot of experience in one ares, try to find advisors that have experience in another. By picking advisors who can “round out” your team’s knowledge and capabilities, you’ll ensure that your business can grow in every aspect—not just the ones you and your employees know. Plus, when it comes time to hire, say, a head of marketing, your advisor can give you his or her expert opinion on the candidates.
- Find Experience in Building Companies. It is always helpful to have advisors that have experience building companies to help you implement the processes and structures that drive success.
- Look for Industry Experience. If possible, you also want advisors to have experience in your industry. Imagine you’re the founder of a healthcare startup. An advisor well-versed in the healthcare industry can help you understand how health industry players – health plans, hospital systems and pharmaceutical companies – act and buy solutions. They may also have contacts in the industry and leads for potential employees. As a company changes organically, even the best business plan can fail to anticipate all the challenges or opportunities that will come up. Having a board member from an analogous industry, even in an advisory capacity, can help you keep from reinventing the wheel.
- Look for True Belief. You also want to ask people who seem to genuinely passionate about what you’re doing. Being an advisor is time consuming, and it is rare that you are paying advisors so having advisors that are personally interested in your business is a key criteria.
- Seek Market Presence for Credibility. Certain advisors that have a market presence or are well-known can also lend credibility to your organization. For example, if you get a prominent angel or VC to act as an advisor, you gain credibility within the entrepreneurial community.
- Build a Pipeline. To create an advisory board of five people, you probably need to reach out to 25. Unless you know them, of the 25 you reach out to, you will likely hear back from 15 and end up with your final five.
- Look for Those That Will Challenge You. The best advisor is often one that challenges you. Being forced to examine your assumptions, take risks, and make dramatic changes is hard, but usually, it’s worth it. So if you’re sitting down with someone who’s blunt and a little aggressive, don’t autom