Working at a college that is known for teaching entrepreneurship, I meet a lot of very interesting people and an assortment of businesses. Because student entrepreneurs live in a very small bubble and lack a well developed network of their own, I am often asked to be an advisor. My response has generally been, “I am happy to provide advice with regard to topics that I know, but I do not wish to be an advisor.”
Some entrepreneurs think that having a laundry list of advisors is a good thing, but it can actually be a distraction and sometimes impede progress toward building a product or raising capital. For instance, an inexperienced advisor might have a heavy hand and become too involved in the day-to-day operations and decisions. Others may be so detached from the company that they don’t remember having committed to being an advisor. This is really embarrassing and damaging when an investor calls to ask their opinion of the business.
I recently turned down a former student of one of my BootCamps who asked me to be on his advisory board. I explained that it was not a statement of how I saw the business opportunity or him as an entrepreneur, but that I didn’t think I could be much help given both my location and lack of specific domain knowledge of his industry. Location is an important criteria especially if you need help building a team. Introductions to potential team members, investors, and customers is something an advisor should be able to do. If the proposed advisor’s network is in the northeast and you are located in Texas there is little that advisor can do to be of help.
Domain knowledge is something else that an advisor could bring to your team. Every industry is a little different, so having someone who has built a company or worked in your industry can save you a lot of time and help to avoid mistakes.
Knowledge of how to start and build a business from the ground up is another skill worth having on your advisory board. Having an experienced individual as a sounding board for things like, how to incorporate, dividing the pie, recruiting, negotiating term sheets and convertible notes, or dealing with founder issues can be enormously helpful.
Finally, does the potential advisor have both the time and interest in your success. Can they give you an hour or two each month? What is their motivation for being an advisor? Is the advisor willing to tell you what you don’t want to hear in order to make you better?
So, before extending an offer ask yourself if the advisor checks any or all of the boxes noted above. A few high quality advisors is preferred to a long list of names and titles that don’t bring much to the table. Building a board of advisors is as important as building your core team. Give it the attention is deserves.