Picking a board of advisors… continued

September 10, 2006

Read up on how the process began in Picking a board of advisors…

Out of about 12 phone calls made to prospective board members, only about half accepted, with the others claiming that they had other obligations inside and outside of work that would preclude them from providing informal advice to a start-up every few months. Obviously, I didn’t buy into it. But I’ve been told not to take anything personally in business.

Out of the 6 respondents who accepted, we have close relationships with 4; the other two we’ve never met in-person but were referred to us by close contacts. We decided to ask two Cornell professors to advise us. Seth maintains close relationships with his professors from when he was in school and keeps in touch with them on a regular basis. This is a logical choice, since one of them teaches entrepreneurship and the other is a leading technology professor in the computer science department. One (our favorite Texan) comes from marketing/advertising, and the other three come from financial services, one payments consultant, and two commercial banking and credit card experts. So now we have a board. I don’t think we’ll have any fancy meetings. But I feel much better that we have a network of older executives who can provide useful insights and advice to us in times of need (of which I imagine there will be many). I should also mention that we have received interest from 3 individuals who unfortunately could not have a formal relationship with our company (i.e. be listed on our website) due to conflicts with their corporate employers. Instead, they have pledged to help us in any way they can on an informal basis. I’m sure that will be plenty of advice.

Bottom Line: Every start-up should have a board of advisers. A board of advisers is not the same as a board of directors. Most start-ups don’t need to go through the legal hassle and paperwork to create and elect members to a board of directors. A board of advisers is much more informal (usually does not require compensation or paperwork) and gives you two of the big benefits of a board of directors. The first is credibility. Having older, successful and experienced people associated with your company will only help as you try to build your own credibility as an entrepreneur. Second, surrounding yourself with this crowd will give you a support group of qualified (hopefully) individuals to whom you can turn for advice when you need it.

JT

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