Attracting Top Names to Your Advisory Board
BY Ralph Ward
Q:Our software company is growing very fast, looking toward an IPO next year. However, our product competes with some really big, well-established firms, so we need both to establish credibility in the market and to keep posted on the latest in our industry. I want to establish an advisory board that includes some major names in our sector, but how can you lure board talent like that when you're still a little guy like us?
A: You're making a smart move by building an advisory board of heavyweights to mentor you through your company's growth. But you're right, gaining their notice won' be easy. Well-connected senior managers from name companies, top partners in venture firms, and successful entrepreneurs are in great demand for both corporate and advisory board seats.
The first, most obvious lure involves dollar signs, or at least options on future stock. A member of the Boardroom Insider network who works extensively in board recruiting observes that "everybody wants names, but how many of them are there that haven't been tapped by everyone else? The monetary considerations, the upside potential, has to be their first consideration."
But this pro also notes that "the strategic nature and position of the company are important too. Is this a launch that will make my name, and help my résumé?" In short, if you can make your pitch to venture sources and managerial talent, you should also be able to make a strong pitch to board candidates. If not, maybe the company idea itself needs some rethinking.
But there are other monetary levers you can use to lure advisory board talent, and some are not only more effective than others, but can cost less and leave everyone happier.
An entrepreneur in Florida recently told me of his success in drawing very high-income execs to serve on the advisory board of his construction company through smart use of charitable donations. These board members receive only a modest expense check -- but a sizable donation (which could be in stock) is made in their name to a favorite charity. This has proven a highly powerful tool for attracting A-list board members who would yawn at the same amount going into their own bank accounts.