I started my first strategic advisory board (SAB) in 1989 at my first VC-back company, Course Technology, Inc., an educational publishing company. I formed SABs at the three VC-backed companies that followed: Mainspring, Throughline and Mobile-Mind.
There are multiple objectives for an SAB:
- To gain varying perspectives on your business strategy from experts in your market
- To add credibility to the image of the company through the stature and reputation of your advisors
- To have your SAB members introduce you to important contacts
- To have your SAB members vouch for you during VC due diligence
- To have fun
The last – to have fun – may seem quite out of place. But in talking with every strategic advisor I’ve ever had – from Sir Tim Berners-Lee, inventor of the Web; to Brad Feld, one of the most successful VCs in the country (and one of the most responsive and generous in sharing his deep knowledge of the start up world); to eminent professors, including Lynda Applegate of HBS, Mary Cronin of BC , and Bill Graves of UNC- they all agreed that getting to know each other during our twice a year in person SAB meetings was great fun and the prime reason they joined the SAB and stayed as members.
When I was at Mobile-Mind I was asked by one of our investors to put together a presentation about SABs that he could share with his portfolio companies, which I was glad to do. My apologies in advance for the all bullet point, very dated and boring look of this PowerPoint presentation, but its many points are still valid. It got a slight up date with the help of Alex Karys, a fellow TechStars mentor, before i presented it at TechStars several years ago . No changes since.Advisory Boards 7.31.13.ppt
One amusing story about SABs, and why you might want to name yours “Group” or “Panel”, instead of “Board”: one day at Mainspring Roger Heinen, the Chairman of the Mainspring SAB, came into our office laughing heartily and waving a sheet of paper in one hand. It turns out we had been hiring staff from a local consulting company, they had gone to our web site, and erroneously concluded that Roger was Chairman of our Board of Directors, and therefore directed their law firm to send Mr. Heinen a nasty letter threatening us with legal action if we didn’t immediate cease and desist from hiring away their employees. After passing this legal missive around we all had a good laugh before carefully filing it in the corporate circular file.