Managing your board of directors

Silhouettes of Business People Discussing Business IssuesFirst time entrepreneurs seldom give enough thought to their Board of Directors, many don’t have one until forced to after raising a series A round of investment. That’s what prompted my first post about BoDs. Before we get into how to manage a BoD let’s just spend a minute on the makeup of a BoD. Experienced founders know that the BoD has hiring and firing power over the CEO – the CEO reports to the BoD. That being said, Series A investors will take as many as one or two Board seats if there are two vcs investing. Generally they will allow two founders. Because no one wants paralysis of the venture through a 50/50 split of the BoD its in everyone’s interest to add a fifth independent Board seat. That should be it until you raise a Series B and C at which time you may need to add another investor and/or outside Board member. But I was taught to keep Boards small; the smaller the Bod, the easier it is to manage, which is the job of the CEO.

What is the value added of your Board? That depends on the added value of your investors whom you have chosen. The Forbes article buy Chaka Booker, Your Board Of Directors: Managing Their Gift And Their Curse, provides a good answer:

Board members generally have a depth of experience that has exposed them to a range of problems in a variety of contexts. As a result, their minds move quickly. They understand patterns. They ask questions you don’t have answers to and provide suggestions you hadn’t considered. They have an uncanny ability to poke holes in your thinking and mend holes in your strategy. This is their gift.

Here are Chaka Booker’s tips on managing your BoD, with my annotations based on experience serving on half a dozen boards:

Boards don’t focus on execution.

The role of the board is strategic, not operational. Typically they are freer to explore strategic alternatives because they are freed from the weight of execution. You need to be open to these ideas, even if they generate stretch goals. Keep in mind you and the BoD are typically on the same side of the table: how do we best create value in our venture?

Boards don’t need details. Until they need them.

That means that while you may only present the absolute minimum amount of detail to support your business case, be prepared to have all the details that went into your decision in the appendices to your BoD presentation.

Always “pre-wire.”

I learned to brief each member of the BoD before the Board meeting from Sigrid Reddy, who was the Director of the Watertown Free Public Library where I was assistant director. She either met personally or had a phone call with every member of her Board of Trustees (the non-profit equivalent of a BoD for a public library) to preview any potentially controversial topics and find out where each member stood on them. There should be no surprises at your BoD meeting if you have done your pre-meeting prep properly.

As I’ve written elsewhere, founders need to get their Board members to work for them, either en toto or as individuals. This means you know the experience and expertise of each BoD member as well as how likely they are to help, if asked. Too few founders realize that their BoD is a valuable resource that they should manage just like other resources – capital and human – under the CEO’s purview.

But don’t just rely on a conversation, make sure you send a brief memo along with the list of agenda items to each Board member well in advance of the meeting. Don’t make assumptions that they understand all the issues or even that they are going to back you if the issue comes to a vote. Test your assumption in that f2f meeting or phone call.

Keep in mind that your directors are usually extremely busy people, so get them in the habit of dedicating a block of time with you before your BoD meeting. Also don’t assume Board meetings are simply a formal necessity whose function is to rubber stamp your decisions. You should welcome being challenged on your assumptions by BoD members. And you should work to generate a spirit of camaraderie amongst the directors. Helping the BoD function as a team rather than a group of individuals will turn them from spectators to active participants in your venture – again, at the strategic level. The only operational functions the Board should play are to interview high level candidates – at your request – and to help in raising capital through their connections.

If you have zero experience building and managing a BoD I suggest you mine your contacts for a CEO who has that experience and is willing to share it with you. There really is no work experience that can substitute for the important task of building and managing your Board.

Finally keep in mind that being a director these days probably carries more risk than back in the last century when I was founding companies. You may need to invest in D & O (Directors and Officers) insurance if you have a key Board member who won’t serve without it. Directors have a fiduciary responsibility to shareholders, so if your venture goes sideways they bear some exposure to litigation from shareholders. D & O insurance is expensive, so try to avoid it unless you have so much capital from your seed or first round that it’s a very manageable expense.

To those of you who haven’t raised vc money, keep in mind that your lead investor will also be a Board member, so your due diligence on them and their firm is doubly important.


Looking for the exit sign?


I’ve had firsthand experience with both buying and selling companies. Buying two companies and selling three were great learning opportunities. I know enough to be dangerous. If you are ready to start looking for the exit sign, I highly recommend the article on TechCrunch What every startup founder should know about exits by Benjamin Joffe and Cyril Ebersweller.

But the first question in this process is how do you know you are ready to sell the company? Surprisingly the article skips over this important step. There are several signals to listen to about selling your company.  Selling the company is a CEO job, aided by your CFO, if you even have one! In my day every VC-backed company had to have a CFO – if only to watch over the millions of dollars in the startup’s checking account. But today?! Uber just hired their first CFO recently! One reason is that there are many CFO’s for hire, either through an agency or directly. So it shouldn’t be a problem for you to find one.

  • Venture is out of cash, can’t raise any more and will have to shut the company down if you can’t sell it. This is the worst case, but not uncommon case.
  • Need more capital to grow. Perhaps you are in a capital intensive business but one that investors are leery of. So if you don’t grow eventually you will have to sell or go under.
  • You and your co-founders have been at it a very long time. You’re tired and worn out. Perhaps infighting and/or staff attrition are creating havoc. People want out.
  • Venture is doing fine but you just were given an offer you can’t refuse. CEOs have a fiduciary responsibility to do what is best for the shareholders. So it’s your duty to bring this opportunity to your Board.
  • You lack the capital to be an acquirer. By building strategic alliances in your market over several years you have seen that growth of companies in your market is largely through acquisitions. Since you lack the capital to be a buyer you will need to be a seller. Look for being acquired by a company that does acquisitions exceptionally well, like Cisco or Thomson Reuters, that you would enjoy working for after the sale is over.

There may well be other reasons, but as you can see from this list three out of five come from negative scenarios, only two from positive.

Ever heard of the Boy Scout’s motto? It’s Be Prepared! In the case of mergers and acquisitions that means from the day you incorporate your venture you should be prepared to be acquired.  That does not mean your goal or purpose is to sell your company! However, it is a highly likely option. In 2016 97 percent of exits were M&As. And most happened before Series B.

As George Patterson, managing director at HSBC in New York said, “Good tech companies are bought, not sold. The question is thus: how to get bought?”

Patterson says it’s important to understand how mergers and acquisitions actually work; how to prepare a startup for an exit; and how to develop a “feel” for the market you’re exiting through and into.

There are five types of acquisitions according to Mark Suster, managing partner at Upfront Ventures:

  1. Talent hire ($1 million/dev as a rule of thumb —  location matters)
  2. Product gap
  3. Revenue driver
  4. Strategic threat (avoid or delay disruption)
  5. Defensive move (can’t afford a competitor to own it)

As you can see, three out of five are driven by negative scenarios for the buyer! This is no coincidence. Evidence shows that most acquisitions fail. That’s a deep subject I won’t get into here. But if you are selling you are best off being a talent hire or revenue driver.

  • Do everything by the book. Your CFO or freelance CFO must have experience in  acquisitions! Your lawyer and CFO will make sure you do things that will make it easy to sell the company, like a clean capitalization table and incorporation as a Delaware C-Corp. Use of an accounting system that is set up correctly and maintained assiduously. NDAs with all employees and significant others.
  • Make sure your IP is as clean as your cap table. That means that someone in the company on the operations side should be in charge of tracking all IP activity on your behalf (trademarks, copyright, patents) and that you are conforming to all Ts and Cs of any business arrangements your venture is part of, from your office lease to a distribution agreement.  Buyers performing their due diligence will want easy access to a complete, well-organized set of all documents pertinent to your IP and that of others, such as software licenses.
  • Manage expectations. Everyone in the company should know that the sale of the company is one of several possible scenarios. Keep in mind, “No surprises!” But you don’t want your staff looking over their shoulders constantly trying to spot the buyer, just as you don’t want them trying to figure out how much they will be worth in the event of an IPO.
  • Know your market. You and your management team should get familiar with possible buyers through your business development or strategic alliance initiatives. In fact this is one of the best way to be bought, as you can date before you marry.

As I wrote about previously, in the post Why I don’t like hearing about exit strategies, …Your job is to build a great company. If you do that, the exit strategy will take care of itself. And if you don’t … the exit strategy will also take care of itself.” So don’t let the idea of an exit be a distraction to you or your team.

Why you need “smart money”


Sunny Dhillon is a partner at Signia Venture Partners in the Bay area. Despite his being a VC, I have to say that I don’t recommend founders follow his advice in the Forbes article How To ‘Hire’ The Right Venture Capitalist.

He groups VCs into two groups: VCs who are happy to just write a check and VCs with experience and expertise. Back in the day this is what we used to call “dumb money” and “smart money.”

Mr. Dhillon writes that:

Founders who already have a complete team in place and minimal risk in their business really only need gas to add to the fire, not necessarily someone to help them put out fires. In this case, the best VC to “hire” is the one who offers the most favorable terms aka the cheap money. You can then bring on people for their experience and expertise later when you really need it.

The only startups that can take just “dumb” money are very successful serial VCs. This  very small group knows what “minimal risk” is – good luck to the rest of you – and probably has built a great team from their co-founders in other ventures. They have a A+ network of investors, advisors, mentors, and peers. They know that given their track record they won’t have a problem raising multiple rounds of capital or tapping into valuable experience and expertise when they need it. And even they will need it at some point.

But if you aren’t a member of the very select multiple successful startups club I strongly advise you not to take the advice to just get dumb money. There are two major reasons: one is raising capital and the other is access to expertise building successful companies market and domain experience, and ability to recruit world-class talent.

Very, very few ventures succeed with only a single round of venture capital. Uber is on their series G. And yes, just like every other startup that isn’t valued at $60 billion, they started with a Series A. So just because you have a team and think you have “minimal risk” doesn’t mean you won’t need multiple rounds of capital. The best way to do that is to start with a VC with both deep pockets and a strong network of peer VC firms. Because VCs like to syndicate their deals to reduce their risks. Often even if they have enough capital to fund you until an acquisition or IPO they will often bring in one of their network to co-invest in a Series B, C or later round. So founders need to think beyond the first round. All four of my VC-backed startups had multiple rounds and multiple investors, including top VC firms and corporate investors like Apple, MIT, and Reed Elsevier. The bottom line is even if you are fortunate enough to find a VC who is “happy to just write a check” the odds are that you will need more than that from your lead investor.

Beyond supplying capital on terms and conditions you can live with – and believe me, Ts and Cs can be more important than your valuation – VCs have varying experience in elements of building successful companies and the partners have different domain expertise as well. By bringing multiple investors into your company over several rounds you will greatly strengthen your network. Finally, you will never know when you will need help! You can start with a great team and traction, but what happens if there’s a falling out with the team? If an 800 pound gorilla like Google or Facebook decides to clone your key feature ,as Instagram did with Snap? If it turns out you are going to need 5X the capital you thought you needed? Don’t judge a VC firm by how they work with you when things are going well, judge them by how they work with founders when the company has problems. That’s why you need to do your due diligence on your investors.

And there’s another value-add that blue chip VCs bring to the table: their network of former founders and top flight executives. As you grow you will eventually exhaust your own network. That’s where a VC can help you find a CFO, COO or other executive needed to really scale the company. It’s amazing the contacts VCs have. At Course Technology I had the idea (not a very good one) that an investment from Apple Computer would add to our credibility in our core market, education. Paul Maeder of Highland Capital, who was brought in on the second round by Bill Kaiser of Greylock, just picked up the phone and called Barry Schiffman, who was in charge of corporate investments at Apple and a month or so later we had a bank transfer from Apple. When we were looking for an outside, independent board member one of our other investors knew the former president of Dartmouth College. Again, with one phone call he was eager to work with us.

Which brings up a final point. I was taught by our investors to keep the board small. So you don’t want or need to give board seats to all your investors. MIT, for example didn’t even ask for a seat; they were happy with observation rights. Observation rights means the investor can attend board meetings but not participate in the board discussion or vote. It’s a great way to tap into an experienced investor’s perspective without having to manage yet another board member.

I don’t know Mr. Dhillon nor Signia Partners and it’s been many years since I raised capital. So please don’t take my word for why I believe virtually all founders need smart money, not dumb money. Talk to your mentors and advisors before you follow his advice, my advice or any advice you are getting from the web, an article, book or video or even your family.





Even highly successful people rely on mentors


The article in The Wall Street JournalMicrosoft’s Peggy Johnson on Her Trusted Advisers, caught my attention with its subtitle: The deal maker calls on mentors from former Paramount chief Sherry Lansing to Liberty Media’s Greg Maffei.

I think most of us tend to perceive mentors as advisors and guides to startups, perhaps only to first time entrepreneurs. The received wisdom seems to be by the time a company is launched and garners financing the Board of Directors and/or a strategic board of advisors replaces mentors from an accelerator or academic program like MIT’s Venture Mentoring Service.  And while there are examples of startups that do stay with MIT VMS for years, they are by far the exception.

So why is Peggy Johnson, Microsoft’s executive vice president of business development, relying on mentors?

… she largely relies on her gut when making big decisions but then “validates her intuition” by checking in with valued former colleagues, mentors and, first and foremost, her husband, Eric Johnson, an independent investor.

It seems that Ms. Johnson treats her mentors as a personal board of directors, advising her on career moves, like joining Microsoft.

So all you founders out there, don’t think of mentoring as training wheels you can easily drop when you move on to a riding two-wheeler. Life as a CEO is tough. Where do you go for help? Not your Board! They might perceive you as weak. After all CEOs do report to Boards of Directors, who have the power to fire them and hire their replacements. And VC dominated  boards are notorious for bringing in “adult supervision” if they feel a startup they have funded is going sideways.

So here’s some advice from a long term mentor: hang on to those mentoring relationships and when the going gets tough as CEO you’ll have some impartial and knowledgeable advisors who not only can give you feedback, but know you, and knew you when you were first starting out. And if you are so successful you are invited to join the Board of another company you just might want to check in with one of your mentors before you do, as Peggy Johnson did with Greg Maffei, President and CEO of Liberty Media (and a former Microsoft executive as I recall).

“Greg emphasized that it was as important for the board to be a good fit for me and my goals as it was for me to fit the board’s needs,” Ms. Johnson recalls. She joined in 2013.

You’ve raised early-stage funding! Now what?


This stage of a startup’s lifecycle seems somewhat neglected to me, as this is the first article I’ve seen that really addresses what you need to do after you have closed your first round. The Entrepreneur article You’ve Raised Early-Stage Funding! Now What? by Candace Sjogren lists four “to-do’s” post-funding.

Raising capital is a totally consuming, exhausting process, even if you didn’t have 225 conversations and 95 investor pitches before you raised capital, like Candace Sjogren. She had 30-second, 5-minute, and hour-long presentations and it took her over a year before closing her final investor. I would suggest that founders do have a 30-second pitch and a 5 minute pitch, as both are critical in the increasingly prevalent pitch contests. I’d only differ on the hour-long presentation. That’s way too long for a presentation. As I’ve written elsewhere the goal of a presentation is to get to a conversation. Presentations are monologs, what you want as a sales person are dialogs. And selling equity is a sales process! Perhaps that’s why it took her so long to raise capital. Obviously hard to say of course. But the goal of a presentation is engagement, you want to get the investor talking. Hard to do if you are presenting for an hour!

Here are her tips, with my  comments beneath each tip and one or two of my own:

1. Communicate early, often and to everyone.

This is very good advice. But more to the point is how you handle bad news. That’s going to happen in your startup and how you communicate it and how you handle it are critical in managing your investors. First, get bad news out quickly. The worst thing that can happen to you as a founder is to have one of your investors find out the bad news from someone else. Your investors will respect you for not trying to hide the bad news. But make sure you have a couple of options on how you plan to handle the bad news, whether it be a CTO jumping ship, a missed launch date, or an employee harassment issue.

Keep in mind investors are very busy people. I still remember Bill Kaiserof Greylock telling me he went through over a thousand business plan to make two investments, one in us and one other company I’ve long since forgotten in one year. So make sure you aren’t getting into that bad social media habit of communicating trivia. Investors don’t care what you ate for lunch or where you ate it! They want to know are you making or better yet, exceeding your numbers! When my partner and I were running HyperVest, a very early incubator, Kevin set up a password protected web site where we posted news of interest to investors. Kevin had a lot of angel investors so self-service leveraged his time and effort.

The most important time to talk with each individual Board member is before your monthly meeting. If there’s an issue that will require a Board vote you want to know in advance how they will vote. Make it a practice to touch base with each Board member at least once and preferably twice between Board meetings.

2. Structure board meetings before you have a board.

Scheduling meetings of investors before you have a board certainly makes sense. But I would advise you to create a Board before you start to raise capital. You need that structure in place and it shows you are a real business, not a hobby! The one thing investors want is predictability. So the purpose of a Board during the emerging company phase is to review the previous month’s actuals versus projected, discuss plans for the next month or more, and ask for the Board’s help on strategic issues, such as should you accept an investment from a strategic investor? Keep in mind the one thing investors want from a founder is predictability. Don’t low ball them on your revenue projections and pay attention to top line, bottom line, and most importantly your cash position.

3. Engage your investors for assistance.

I never had angel investors and I suspect that Candace had many. I’ve only worked with either venture capitalists (Greylock, Highland, Sigma et al) or strategic investors (MIT, Apple, Silicon Valley Bank et al). So her advice may be sound for angels but I don’t advise it for institutional investors. As I said before, they are very busy people. However, where they can and will help you is in recruiting. VCs have giant contact lists and often an acquisition of one of their companies will result in redundancy of roles, with the concomitant layoff of CFOs, CMOS, etc. Also ask them to interview CXO candidates. VCs have a lot of experience in this area. Bill Kaiser in particular was a very astute interviewer. And of course they should help you raise your next round. The best thing you can do for a VC. aside from making your numbers consistently, is to give them an intro to an exciting startup that you think is a fit with their investment strategy.

4. Know when to say “no.”

The domain expertise of your Board members will vary widely. You should know their expertise and experience thoroughly. Then you will know who to go to for what type of advice. But be very selective, only ask for advice on major issues, like key hires, and prospective partnerships. As said before, VCs and strategic investors are extremely busy, so be very selective in taking up their time. And as Candace writes, just because you are asking their advice doesn’t mean you are committed to following it. Board members may differ on which direction to go in, as CEO it’s your job to set the direction of the company.

5. Use of proceeds

Candace doesn’t touch upon this issue but when you pitch your use of investment proceeds is an important, and usually last part of your pitch. Where will you invest that money? Things change in rapidly startups and in the six months or more it normally takes to raise a first round and close it things can change. So make sure you review your use of proceeds with all the investors in the first round and make sure everyone is in sync with major investments, be they hiring a CXO, capital outlay, or other major expense items. Keep in mind, investors hate surprises! You should have your Board set a ceiling on how much you, as CEO, can authorize before needing Board approval. It’s been sometime since I’ve sat on a Board so I won’t try to give you a number. That’s what your network of peers is for. They should be able to tell you what is a typical spending authorization level for CEOs.

6. Celebrate!

Raising your first round is cause for celebration. Hosting a dinner for all your investors won’t just show your appreciation for their faith in your company, it will give them an opportunity to get to know you and your management team, as well as each other if they weren’t already acquaintances.

Raising your first round is a like a sailing race, where an important part of the race is getting to the starting line just on time, not too early and certainly not too late. The race is now really just beginning. So take a deep breath, replenish yourself and get ready for the really hard work of company building that lies ahead.



Allocating equity in a startup – even to mentors!

davd parker

One of the most difficult and challenging issues facing any founding team is how to allocate equity and who to allocate it to. It’s a zero sum game – you only have 100% of equity to divide up, you can’t generate any more. Issuing more shares just dilutes the ownership of existing shareholders. I’ve written about this issue previously: Founder equity for academic teams turning into companies. And obviously, hot topic that it is, there’s a lot on the Web about it.

However Dave Parker’s article on How Much Equity Do You Give Early Team Members? was the first article I’ve come across that not only addresses allocating equity to advisors and board members, but mentors as well. Not only that, mentors come first! It’s worth quoting Dave Parker in full about what he has to say about mentors, with my comments interpolated.

Mentorship is free – or at least should be. Mentorship is something you do to give back to your community. Yes, there are people that use it to sell their services – but you’ll discover them soon enough. You should plan on buying the lunch/coffee/beverage.

Yes, mentorship is a purely voluntary activity. But Dave Parker’s warning about professional service providers, be they lawyers, accountants, financial advisors, or insurance agents, is advice mentors need to heed. One of the founding principles of the MIT Venture Mentoring Service is that all mentors agree to come to the organization with no agenda of their own. So you don’t have to worry about this issue if you are lucky enough to be mentored by VMS. But accelerators, incubators and other entrepreneurial organizations tend to attract professional service providers like flies to honey.  Their thinking is straight forward: get to a hot startup before it’s hot and have their fees grow with it. Maybe even take equity in for all or part of their fees and really make money if the company strikes it big. You will need all these professional service providers and perhaps others. But the best way to find them is through personal referrals from other entrepreneurs, not by who happens to introduce themselves to you at a networking event or who volunteers to mentor founders.

One way to pay for mentorship is simple: pay it forward. Are you currently mentoring someone coming up behind you? Do they look different than you? The answer to both questions should be yes. You can always find someone that needs help who is a “couple of chapters behind you in the book.” What skill set do you have that you could mentor?

The point about not looking like you may seem simple – but the comment is about being intentional. Selection bias and our own networks tend to keep us insular. Branch out. Here’s a great article on Men who Mentor Women at HBR.

Again, Dave Parker has something new and important to add to the subject of mentoring: diversity. Frankly I’ve been only concerned about diversity amongst the mentor groups I belong to, as they are dominated by white senior citizens like myself. VMS and other mentoring organizations have made concerted efforts to add women and minorities to but in general we’ve let the founders self-select. So if you have are choice in choosing who you mentor, keep diversity in mind and help give women and minorities a leg up the startup ladder.

If you find that you’ve met with a specific mentor on a recurring basis – don’t take the relationship for granted, make it more formal. Especially if mentors continue to show an interest and add value, consider moving them up the ladder to advisors. You want your company to survive and grow – it’s good to have aligned incentives. They may say no, and that’s okay, but the offer shows that you respect and value their time.

I’ve written elsewhere about the value of advisory boards and how to start and manage them (just search “advisory boards” on the blog). And Steve Blank, an entrepreneurial authority, recommends founders put together an advisory board “as early as possible.” So do consider adding your mentor or mentors to your advisory board. But keep mind that while gaining an advisor you are losing a mentor. The roles and responsibilities are far more formal for an advisor than a mentor. And an advisory board advises the venture; mentors guide and advise the entrepreneur.

Read Dave’s article in full for help how to allot equity to board members and founders, and additional valuable advice on the subject.

Mentors, Teachers, Coaches & Advisors

human resources

Steve Blank, noted educator of entrepreneurs, has a superb video series about startups which is available on YouTube. One video in particular very clearly delineates the differences amongst mentors, teachers, coaches and advisors, and explains the value of each to the startup.

Mentors, teachers and coaches advance your personal career. If you want to learn a specific subject you find a teacher or take a class.

If you want to hone specific skills or reach an exact goal, hire a coach.

The one that founders sometimes forget is the mentor. If you want to get smarter and better over your career, find someone who cares about you enough to be a mentor.

A key point Steve makes about mentors is, “Mentors are a two-way street.”  They think they can learn something from you in addition to liking you. And having been a mentor formally for over eight years and informally for many more years, I can’t emphasize this enough. I’ve learned a lot about fields I never would have entered myself, such as medical devices or bio-engineering and even more about founders and how they develop through the process of building a company. As Steve says, many founders will themselves eventually become mentors.

A favorite topic of mine is advisory boards and I often recommend that founders form and advisory board once they have solidified their business model enough to use it as filter in choosing advisors who can help their business be successful. Teachers, coaches and mentors help the founder to develop and succeed; advisory boards help the company to succeed. Boards may provide generic advice to the founders, VPs and even staff.

Steve recommends putting together an advisory board “as early as possible.” This is one point where we differ. Having formed advisory boards for each of the four venture backed companies I founded, my experience was that if you create an advisory board before you solidify your business model you can end up with advisors who don’t fit your company.

But his reasons for forming an advisory board are quite sound: get experienced advice to help you soft out whether or not your vision is a hallucination or not. Expand your circle of accumulated wisdom past your investors.  Your investors or Board are not necessarily your advisors. They may lack the domain expertise you need. And the Board is your boss, not your advisory board.

Steve doesn’t really address how you find mentors, teachers, coaches and advisors. Much like finding your first employees, this comes down to using your personal network and the networks of your founders to find previous employers, professors, retired executives, and even peers who are willing to act as mentors or advisors. These days virtually every incubator or accelerator comes complete with a mentoring team. You can find many useful courses via MOOCs – Massive Open Online Courses – from edx, Coursera, Udacity and others. Generally you will need to pay coaches. MOOCs are free, but exec ed courses from places like Harvard are decidedly not. Mentors and advisors are generally compensated by small stock grants.

You can get a detailed roadmap on how to build an advisory board from my post Strategic Advisory Boards. You may also want to read the post comparing and contrasting mentors with advisory boards.