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4 Steps to Securing a Rock-Star Advisory Board

Start-ups are launched every day but only a select few will ultimately be huge hits in their industries.

Entrepreneur

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To help accelerate and increase the probability of success, start-ups need to seek other industry leaders to support and evangelise their efforts.

Enter the advisory board. From ongoing product feedback to investor due diligence to media interviews to customer prospects and more, a strong advisory board can completely change the course of a new company in ways it can’t accomplish through any other method.

For those looking to get a stellar advisory board to join your start-up, here are a few steps to get you started.

1. Target leaders in your industry.

The first step to building out an advisory board is determining who should be part of it and why. Focus on the most strategic needs of your business – third party validation and evangelism.

Related: When Investors Join Your Board

For instance, many tech start-ups erroneously assume they should seek an advisory board of technologists to assist in shaping product development. However, a more strategic approach is to target top customer executives who might ultimately purchase the product, can articulately speak with investors, can provide access to their teams, and will serve as references for the media and other customers.

For example, in IT, the perfect candidate is a chief information officer (CIO), the ultimate decision maker for strategic IT purchases with a full grasp of both the business and technology. As your company grows and your product line expands, you might later add a technical advisory board, but initially, focus on the business side and resources that can help you attract customers, media, analysts, partners and investors.

2. Tap your network and beyond.

When approaching these individuals to join your advisory board, avoid the cold call. This is a 100 percent networking process. Ideally, you will want to have approximately six to eight members, since you will have only a small amount of time from each one.

Once you make contact with potential members, ask for introductions to their peers. The onus will be on you to pitch your company and team and to persuade potential advisory board members that your start-up is going to be a winner.

Keep in mind, these CIOs and top executives are being approached often to participate on other boards, and you will need to make your company stand out from the rest. A coherent value proposition, a passion for your company and technology is mandatory, as is being highly knowledgeable about the market.

3. Realise time is money.

The question you may be asking is why these busy executives would take time out of their hectic schedules to be a part of your start-up. Many top industry executives are fascinated with start-ups and the entire process of innovation.

Most marquis executives you will target have spent their careers at Fortune 500 companies and will be drawn to the raw potential of your business and your team’s unbridled commitment to creating something great. However, you should also be prepared to offer advisors a small number of stock options.

4. Be efficient and strategic.

Once you have the advisory board in place, make sure you use its time – and yours – wisely. These executives will only provide a few hours per quarter, so be sure to focus on the most strategic matters you face – whether it be fundraising, lead generation, pricing and packaging or media.

Don’t look to these executives for detailed feedback on the features and functions of your product; use them instead as a gateway for input from their teams on these items. Learn about how they spend their budgets and their big-picture priorities, as these will be similar to those of your customers once your product is launched.

If you recruit the right advisory board and leverage them strategically, this will be one of the best investments you will make. Wise companies that have these industry ambassadors have a better chance of raising investment capital, attracting customers and employees, making a big splash when your start-up is ready for prime time and ultimately jumpstarting your success.

Related: 5 Rookie Networking Fails And How To Avoid Them

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Partnerships

What To Do When Partnerships Go Bad… Very Bad

What do you when the honeymoon is over and you discover that you’ve gone into business with a snake?

Alan Knott-Craig

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Q: My business partner is trying to screw me out of my business. I approached him a month ago to say I wanted to chase a different path, and sell my minority stake. It’s worth R1 million, but the shareholder agreement says that if I resign he has a call option to buy the shares for nil. His response to my request to exit was that he would exercise his option and pay me nil. What should I do? Should I stay? Should I walk away from the shares with no money? Should I fight for what he owes me? I’m not happy in the company, but I can’t bring myself to write-off the value of my shareholding. — Anonymous

Know who you’re partnering with

I have bad news for you. You’ve lost your money. Kaput. Gone. Minority shareholdings in unlisted companies are worthless, unless you’re in bed with honourable people.

If your majority shareholder is a crook, you’re screwed. You can’t sell to someone else, and a crook won’t do a fair deal to buy you out. If you stay, you’re delaying the inevitable.

You will be screwed. Rather leave now than later. Rather be happy than hang onto the promise of a pot of gold that never materialises.

Focus on creating new wealth

You’re an entrepreneur, so you have the instinct to fight. To never give up. To persevere. This is one of those times where your instinct is wrong. If you fight, you’ll end up in the mud with a pig. Pigs love the mud. He’ll enjoy it, you won’t. Worst of all, you’ll invest energy in trying to regain what you had rather than creating new wealth.

It’s a bit like trying to win back the girlfriend who cheated on you, rather than going out and finding a new girl. Rather find a new girl.

Don’t seek revenge or short term satisfaction

Once you’ve accepted that staying is not an option, and nor is fighting, the next reaction is revenge. “Damn it, I’m going to punch him in the head!” Short-term satisfaction. Long-term, it makes you look bad. And maybe you go to jail.

The best outcome you can hope for is that your story gets traction in your industry/circle of friends/town before his story. Believe me, he has already told everyone he knows that you’re unethical and screwed him. That’s what crooks do.

Related: 7 Ways To Quickly Spot The Wrong Partner (And 3 Tips To Get It Right)

Good luck fighting the war of whispers. Rather don’t. It’s bad energy. Who cares what people think. The people who care don’t matter, the people who matter don’t care.

Let your reputation define your achievements

In the end your reputation will be defined by your life’s achievements, not by the words of a crook. If you are a nothing, no one will care about his words. If you make it big, no one will care about his words.

If you want revenge, be successful. Success is the ultimate revenge. The rule for partners is this: Make it easy for them to screw you early. That way you don’t waste a whole lot of time with the wrong partners.

Whatever happens, remember this: Life is an adventure. It’s your choice how you describe your story. Is it a sad drama (‘Oh woe is me’), or is it a funny story with some speed-bumps and a happy ending? Frame your story as the latter. You hit a speed-bump, not fun. But not the end. The truth is that business is rough and tumble. So toughen up.

Don’t lose faith in your abilities

This is where it’s useful to have a loving spouse. With him or her at your back you can withstand anything. Whatever happens, don’t lose your self-belief. You have the magic.

You’ve had a bad experience in business. So what? You trusted someone. That’s not such a bad thing. You just got a bit unlucky that he was a crook. Next time lucky. But there is no next time if you lose your self-belief.

Winston Churchill lost all his savings to financial con-men in 1929. He said he was faced with two choices: Fight to get back what he lost, or make more money. He decided to make more money. Keep moving forward. Don’t look backwards.

PS: The best way to deal with a crook is to play dead. Cut him loose. Don’t engage at all. Just play dead.

Related: 5 Things to Do Before Saying ‘I Do’ to a Business Partner

Listen to this

Alan’s audible book Be a Hero: Make Life an Adventure is now available on amazon.com and Audible.com

Read by Alan himself, Be a Hero is a collection of stories on how to make your life an adventure but also changing your mind-set and tackling adversity.

Ask Alan
Do you have a burning start-up question? Email: alan@herotel.com


Read ‘Be A Hero’ today

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Make Absa Your First Business Partner

Thinking of starting your own business? We’ll help you think further with a start-up plan, funding, payroll guidance and Enterprise and Supplier Development solutions for your business.

Absa

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Thinking of starting your own business? We’ll help you think further with a start-up plan, funding, payroll guidance and Enterprise and Supplier Development solutions for your business.

Firstly, consider opening an Absa Business Banking Account by choosing from our range of tailored transactional account options online. You’ll be able to make and receive payments through multiple channels that make your banking as hassle-free as possible with our cash handling solutions and merchant services.

Plus, if you are a new business owner you can open any of the business accounts we offer online, register your new company with the Companies and Intellectual Property Commission (CIPC) and get a South African Revenue Service (SARS) tax number in one go.

Related: Business Partners Limited Explain What It Takes To Have The X (Fundable) Factor

A business plan is also essential for every entrepreneur, as it forms the roadmap of how your business will achieve its goals and should include its operational, financial and marketing strategies. Our team of experts will always be available to give you all the assistance you need with your business plan.

Once you’ve drafted a comprehensive business plan and you are ready to venture into the world of business, your next step is to register your business as mentioned. SwiftReg assists with checking existing company names and registering your company’s name, B-BBEE certificates, clearance certificates and more.

We also offer advice to franchisees, whether you’re thinking about buying a franchise or want to turn your existing business into a franchise network. And, if it’s funding you need, we’ll work with you to find the right solution. Our business funding solutions cater for start-ups and existing small, medium and micro enterprises (SMEs) with working capital or expansion finance needs.

Related: 10 Questions to Ask Before Committing to a Business Partner

Lastly, when you need help moving your fully-formed business plan in the right direction, you can visit any of our Enterprise Development Centres across South Africa to build and grow it from inception until maturity through unlocking access to financing, markets and business development support services.

For more information or to open an Absa Business Banking Account online, visit our website.

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Partnerships

7 Ways To Quickly Spot The Wrong Partner (And 3 Tips To Get It Right)

Finding the right partners is the path to happiness, good memories and success. On the other hand, finding the wrong partners is the path to conflict, angst and failure.

Alan Knott-Craig

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Business without partners is hard. And it’s no fun. No one to share memories with. No one to celebrate with. No one to commiserate with.

No one to hand over the reins to when you have a personal crisis. So how do you find the right partner?

Related: Getting Partnerships Right: Lucid Holdings

First, make sure you avoid the wrong partner:

1. Birds of a feather flock together

The best crooks are natural salesmen. They talk a good game. Penetrating the façade is impossible, so rather look at who she hangs out with. Are they your kind of people? If not, take a pass. Birds of a feather flock together, always.

2. Live a simple life

A flashy lifestyle attracts bugs. Money attracts leeches. Living the high life attracts the wrong kinds of people. Don’t stick out for having a fancy car. Keep your life simple and you’ll find that bad people will ignore you.

3. Ask your spouse

No one knows you like your spouse. Sometimes she can’t verbalise why someone is a bad match for you, but her gut is saying, “Stay clear.” Listen to her gut.

4. Make yourself vulnerable

If you want to know whether she is going to screw you, make yourself vulnerable. Build in an ‘engagement’ period during which you can break-off the relationship easily, and then make it easy for her to screw you.

5. Watch how she treats other people

Watch how she interacts with people when she doesn’t think you’re watching. If she treats the cleaner differently to how she treats you, stay clear.

6. Play golf

Competitive sport brings out the best and worst in people.

  • Does he lose his temper if the ball bounces badly? He can’t handle adversity.
  • Does he move his ball in the rough? He’s a cheat.
  • Does he throw in the towel before the hole is finished? He lacks perseverance.
  • Does he not care about losing? He doesn’t care about winning.

7. Turn up the temperature

Don’t be afraid to crank up the pressure. The only fool-proof method of finding out who people really are is to turn up the heat to the point where they crack.

Related: Getting the Most from Marketing Partnerships

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The right stuff

Okay, so you can filter out the wrong people. Now to find the right people.

Tinder may work for casual sex, but doesn’t work for long-term business partners. In general, the best way to find the right people is to make it easy for them to find you.

How do they find you?

1. Know thyself

If you don’t know who you are, you can’t be who you are. If you can’t be who you are, you can’t be authentic. If you’re not authentic, the right people won’t be attracted to you.

Find mentors, meditate, travel, read books, take risks, reflect on your experiences, do everything you can to maximise your self-awareness.

And then be yourself.

2. Tell everyone

She won’t knock on your door unless she knows you’re looking. Tell your family and friends that you’re looking for a partner. They will naturally filter people based on your personality.

3. Hold up a flag

She can’t knock on your door if she can’t find your door. Make it easy for people to learn about you and your mission, and to contact you. The Internet is the simplest tool for raising a flag. Start a blog, start opening up, start putting yourself out there.

You might think you have nothing of interest to say, but maybe someone else has been waiting their whole life to read what you have to say. You’ll never know unless you try.

Related: The Power of Partnerships

Formalising the partnership

Let’s assume you’ve found the business partner of your dreams. Now you need to put your partnership in writing, usually in the form of a shareholder agreement.

A shareholder agreement is not for marriage, it’s for divorce. You’ll never look at that document again until the day you have to break-up, especially if it’s an acrimonious break-up.

Pay attention to the provisions for exit and dispute resolution, the rest is gumph. Partnership is like the mafia. Hard getting into, much harder getting out.


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