What is an advisory board, how will this organizational component make a difference, and how does a founder go about creating the best advisory board for long term success?
Women founders face the uncomfortable reality of sometimes not being viewed as experts or experienced, no matter their credentials or career background.
This is even more poignant for female founders in STEM. Fortunately, we have strength in organizational structure to mitigate such gender bias. All businesses benefit by having a strong advisory board. And for female led enterprises, the benefits are especially enormous.
Most founders are encouraged to seek co-founders and a tech team, to have board of directors’ positions open for angel and VC investors, and to hire sales force once the MVP is up and running. Small business owners get even less advice in terms of setting business structure before going to market. I would like to stress that the team is the most important component of a business, and that team must include expert governance for the win.
So, what is an advisory board, how will this organizational component make a difference, and how does a founder go about creating the best advisory board for long term success?
Advisory boards and the board of directors are not the same.
But they can be complementary. The board of a startup usually comprises the founders, board members who have equity interest in the company (such as an angel or VC investor), and an independent director who is not allowed to be a shareholder, but may be paid sitting fees.Term and equity percentages of all directors must be fully delineated via capitalization table, term sheet and contract. These requirements suggest that the board of directors have a direct stake in governance, which is beneficial for the company, but can skew impartiality of expertise. This is where the advisory board comes in.
Read more at Women 2.0 http://www.women2.com/2018/02/02/advisory-boards-boost-companies/
A healthy advisory board could comprise a mix of gender and geographic backgrounds, with noted experience and expertise in product, research, project, finance, tech and sales to name a few key startup necessities.