Startup 101: Build an Advisory Board

A strong advisory board, which shouldn’t be confused with a board of directors, is the single most valuable asset that a start-up can have.  An advisory board is generally a group of three to five individuals that advise the company, often for free, in a capacity that is less formal than that of a board of directors.  The value can be limitless, but some of the more significant benefits include the following:

1. Your team is more important than your idea
   An A team with a B idea is more investable than a B team with an A idea.  Sophisticated investors bet on people, not ideas. This approach has become even more commonplace considering most start-ups pivot three or four times before settling on a business model. The original idea often evaporates and only a strong team can carry the company forward.  An advisory board gives you an instant team, often without giving up any equity, that can build credibility. Smart entrepreneurs will beef up an otherwise thin “management” slide on their deck with an impressive advisory board.
2. It wont cost you anything
   Most advisory board members are not compensated and entrepreneurs should avoid, if possible, any payment other than picking up the occasional lunch tab. Entrepreneurs are the new rockstars and most founders don’t realize that being affiliated with a start-up is attractive; don’t be afraid to ask.  Prospective board members are likely to be flattered by your offer and will welcome the opportunity to lend a hand.
3. The perfect advisory board member
   An advisory board member should be selected because they have (a) access to capital, (b) credibility, or (c) can provide a skill set that the current team lacks.  Every advisory board member should have at least one of these characteristics, but the perfect board member has all three.  Make a list of the skill sets that your business needs and draw up a “wish list” advisory board.  Leverage your network and start making “asks” of people that match your needs.
4. Minimal time commitment
   An advisory board should not require much time from the founders or from the board members. Because advisory boards are generally not compensated, the time commitment should be less than a few hours a month. Many advisory boards never meet formally; entrepreneurs can reach out to specific board members when the need arises. The minimal time commitment can help entrepreneurs attract prestigious, but busy, prospective board members.
5. Maximum flexibility
   Most advisory board members are not bound by contract or formal agreement. As a company grows, its needs may change and more prestigious individuals may be asked to serve.  The informality of an advisory board allows new members to be added and less relevant members need not be formally removed. There is no cap on the number of members allowed, which can help start-ups build a robust team.

What’s in a name?

What’s in a name?  Groups of related trademarks are often referred to as a “family.”  Businesses often treat their trademarks, their business names, and their product name or logos like their children.  A trademark indicates source (it tells purchasers where or from whom the product or service comes.) Trademarks represent the goodwill in a brand.  To be successful, you must protect your own brand with equal vigor and take precautions not to tangle with other brands that may be confusingly similar. 

Many early-stage companies with outstanding innovation, leadership, and funding fall apart because of a poor name selection process, or a misunderstanding of trademark law. This results in an expensive trademark battle or, in some cases, being forced to change a name.  Because trademark owners are so protective of trademarks, they spare no expense to eliminate all  potential threats.  These proceedings can be very expensive and disruptive to a business but are easily avoidable.

Lean Patents Power Start-ups

Startups rarely think about intellectual property protection because they believe that comes after the product is complete. These startups should consider a “lean” patent model that mirrors the lean start-up model and shares the same benefits of flexibility, low initial cost, and optimization. This works well for large and small companies to begin protecting their big ideas/.

File a Provisional Patent Application  

Provisional patent applications are cheap to file.  Really cheap.  The filing fee for a small entity (less than 500 employees) is only $125.  Provisional patent applications have fewer filing requirements than a “regular” patent application.  In theory, you can file a Keynote/Powerpoint presentation as a provisional patent application.