Do you need a startup advisory board? If you are a founder who has been asking yourself this question, check out this presentation from Adam Quinton, Founder/CEO of Lucas Point Ventures and Early Growth Financial Services (EGFS). Topics include: - How to build your startup advisory board - Finding the right key advisors - Board compensation best practices - Structuring an effective board - and more!

1. Startup
Advisory
Boards
#startupadvisors
Gadiel Morantes
Partner
EGFS
Adam Quinton
Founder/CEO
Lucas Point Ventures

2. About Us
*

3. Agenda
• The what, why, how and when of Advisory Boards
• Using (and abusing) your Advisory Board
• Compensating your Advisory Board
*www.lucaspointventures.com

4. What Is an Advisory Board?
• NOT a “fiduciary Board” – as required by law
• RATHER – an ad hoc group of individuals you turn to
for advice and support
– They have no legal obligations
– They may or may not (your/their choice) have a contract
– They may or may not have specific responsibilities and
goals
– They may or may not be compensated
– They may or may not serve in a fixed term (vs open
ended) basis
*www.lucaspointventures.com

5. Why Have an Advisory Board?
• Value-add from knowledgeable/experienced partners
• Social validation – customers/investors/your team
• Discipline – builds accountability
*www.lucaspointventures.com

6. How Do I Structure My Advisory Board?
There are no hard and fast rules but …
• Look for committed, available
partners
• Better to have 3-6 strong engaged
players than 7+ not very engaged
people
• People with diverse skills and
experience
• Ability to support company’s progress
in clearly defined areas, e.g. finance,
customer acquisition, marketing,
technology, etc.
*www.lucaspointventures.com

7. How Do I Find My Board Members?
• Don’t start with “easy wins”
of people you know
• Define what attributes you
want on your advisory team
• Draw up aspirational list of
people that fits those
attributes
• Hunt these people down!
• What about investors? Yes …
but be careful with “non-
investor” investor advisors
*www.lucaspointventures.com

8. When Is It Time for an Advisory Board?
• Any time!
• F&F/Seed stage – boards are usually pretty informal
• Seed/A stage and beyond – they become more formal
• Written Advisory Board contracts = formal
• Contracts should have:
– specified time commitments (at a minimum)
– include legal language on confidentiality
– can include written details of what each Advisory
Board member is expected to contribute
*www.lucaspointventures.com

9. How Should I Use My Advisory Board?
• Your members will have obvious value to add – if you
selected well!
• But don’t be afraid to use for their full network – so other
connections and skills that may come to light
• Don’t over step your pre-agreed time expectations
without their consent
• Keep them up to date – but they don’t need to know
everything, keep it higher level
*www.lucaspointventures.com

10. How Often Do Advisory Boards Meet?
• Rarely … as a collective entity
• Mostly one-on-one relationships with CEO
• Ad hoc communications are the norm
• The most effective Advisory Boards get together a couple of
times a year in person
*www.lucaspointventures.com

11. How Might I Abuse My Advisory Board?
• Don’t take them for granted and ask for too much time or
impose on their connections excessively
• Value added merits a reward eventually: If you can afford
to pay, do so (never cash)
• NEVER have a “Vanity” Advisory Board
*www.lucaspointventures.com

12. How Do I Pay My Advisory Board?
• Very early stage – no compensation
• At the Advisory Board contract stage ... compensation starts
to make sense and honor their contribution
• Compensation should ideally be tied to specific deliverables
• Compensation is a matter of agreement and depends on
time contribution and expected benefit to company
• Typically no cash component but with options being
granted on appointment vesting over the term of the
agreement:
– Advisory Board member will have less time commitment and no
fiduciary responsibility. So 0.10%/year and up seems fair
– Early stage full Board members (who are not founders/VCs) typically
get 1% of equity through options vesting over 3-4 years
*www.lucaspointventures.com

13. Should I Report Financials to My Advisory Board?
• To repeat: your Advisory
Board has no fiduciary
responsibility
• So share as much or as little
as you feel appropriate
• Provides opportunity to
experiment with
dashboards, financial model,
etc.
• Provides “training wheels”
prior to a fiduciary Board
where reporting is a key
obligations/requirement
*www.lucaspointventures.com

14. Finally….
• Balance input from your Advisory Board with your
own expertise and judgment
• Don’t be too reliant on your Advisory Board
• Ultimately fully “own” all your decisions – no one,
even close Advisors, knows your business, your team,
your goals as well as YOU do
*
Take Advice; Don’t Follow Advice
www.lucaspointventures.com

15. Q&A and Contact Us!
*
Gadiel Morantes
contact@earlygrowthfinancialservices.com
415.234.3437
@EarlyGrowthFS
Adam Quinton
adam@lucaspointventures.com
@adamquinton