02/25/2021

How to build a strong advisory team and who to invite to your startup leadership table

Founder: Kathleen Craig, CEO

Company:  HT Mobile Apps (HTMA)

Stage: Preparing for Series A

Date Founded: 2015

Headcount: 11

Industry: FinTech

Being aware and thoughtful about how you build your leadership table is a key component to your startup. Below I have compiled great advice I received from other founders along the way that would have helped me avoid many common mistakes when determining where I spent my time and who I brought along the journey.

Early Advisors

When you get your ‘big idea’ for your startup and begin preparing to launch your company it is tempting to bring anyone who gives you a bit of encouragement or advice to your table.  You may start to meet with them regularly for coffee or a quick zoom, and eventually you may even be tempted to ask them to formerly ‘advise’ your new startup.  Be careful and thoughtful before doing this.  Advisors are great, and they can be extremely beneficial in the early days. However, offering stock or options as incentives for advisors too early and too often can dilute the company before you need to. Many ‘advisors’ can start really strong or be helpful for a call or two, but in order for someone to have shares of the company, be sure that they will be along for a good portion of the journey and can continue to bring value as you scale. Early stage advisory boards can be extremely beneficial when done right.  Rather than just ‘collecting’ individuals who get excited by your idea, try to thoughtfully assemble an advisory board.  There are some great tips and information on advisory boards in a post by Josiah Humphrey here.

Early Investors

Early money is key if you plan to have an externally funded or venture backed company.  Those first few checks written by folks who believe in you and want to join you on the ride are exciting.  However, be careful to not over promise to these early investors.  Typically they are going to be less experienced investors, in the friends and family category. As such they can be very time consuming with questions along the way or asking for more of your time than their investment really should grant them.  Be clear up front about the risks and the vision for the company and ensure they understand while you are grateful for their capital there will be larger investors at some point, and the amount of information shared with them will change and grow as the company does.

Early Board Members

Today, HTMA is preparing for our Series A round. As we are still in that seed stage, our board of directors is made up of current investors.  We do not compensate our board but view their participation in the board as part of protecting and growing their investment by growing HTMA.  Our board is composed of individuals with various investment and industry knowledge and those that can help the company get through obstacles or even if they cannot help, they can connect us with key folks who can.

Growth Stage Board of Directors

As we prepare for our next stage of growth, we are thinking about our board of directors changing again. The folks who lead an A round will most likely  want at least one seat if not more depending on our round.  The other individuals we will be looking for are industry experts and ‘big name’ board members or advisors who add significant credibility to the company and can help open doors and sit at the table with us for larger industry conversations.

Do not be afraid to change your table, make adjustments and evolve as the needs of the company change and scale.

For further tips and thought starters as you create your board of directors check out this TechCrunch article by Samer Hamedeh.