Board Of Directors

**Gaulkin** · 01-29-2008 07:25 PM

How did you assemble your board of directors and what did you do to get them to join?

**BusinessAdviser** · 01-29-2008 08:24 PM

Let's start from the beginning. Why do you need a Board of Directors?

**akula** · 01-29-2008 08:29 PM

Originally Posted by Gaulkin

How did you assemble your board of directors and what did you do to get them to join?

yay! finally, a decent question

**Gaulkin** · 01-29-2008 09:17 PM

I want to create a successful company through the minds of people smarter then myself.

**akula** · 01-29-2008 10:46 PM

gaulkin, in that case an advisory board would be more suitable..
the legal function of a director is to protect the shareholders from bad executives
directors aren't employed to give business advice, in as much as they're employed to hold the management team accountable..the function of a director is much like the function of a cop..and if they don't perform this function, the directors will be legally liable to the shareholders/creditors if the company goes bust...normally, for these reasons, entrepreneurs are reluctant to nominate directors, unless directorship is a requirement for a financing round
in that sense, if you want the advice and the oversight, but still want to keep the board positions available for future financiers - then an advisory board is probably more suitable

so yah...to answer your question..I've never tried to "assemble [a] board of directors"...I've put together a few advisory boards, but as far as directors go, I've always just been forced to nominate a particular director as part of a financing arrangement (and if I could forgo making the nomination, I certainly would)

basically..if the directors make a recommendation to the ceo, it's more like a binding order, whereas if the advisory board members make a recommendation - it's just a non binding suggestion

**Gaulkin** · 01-30-2008 12:42 AM

I eventually do want to issue stock to private investors, can i build my advisory board first and then build a board of directors? Also what incentive do i offer people to sit on my advisory board?

**akula** · 01-30-2008 12:54 AM

well yah..normally that's how you'd do it..

1. target a number of entrepreneurs with relevant experience, vc and exit track record..either through a venture database, or linkedin
2. contact these guys and say "hi, i think your achievements with company xyz were pretty spectacular. it'd be a shame to let all that experience go to waste. let me learn from you and pass down your knowledge. we have advisory board meetings once a month, please come by.
3. when it comes to shopping for a financing round, you can tap the advisory board for introductions, and use their involvement in your company as a form of endorsement..so you'd say "hi, we're shopping for a financing round. come check us out. we have our next meeting on monday. come sit in on the meeting and hang out with all these superstar entrepreneurs"...that's a good way to way to kick off a relationship with an angel or a vc.

In terms of incentives for advisory board members...they're largely non financial (caus the guys are rich already). Normally, the opportunity to leave a legacy, to keep busy, and to mix with fun people are the reasons why entrepreneurs join advisory boards...and when you're an accomplished entrepreneur, you'll also join advisory boards for these reasons.

do you have a list of appropriate entrepreneurs who you can contact?

**Gaulkin** · 01-30-2008 12:58 AM

No, no one yet. Could you give me some recommendations on how i would locate some of these people?

**akula** · 01-30-2008 01:05 AM

linkedin, or pwcmoneytree, or venturedeal.com
you're basically looking for people who've raised money or done business with the kinds of people that you wanna raise money from or do business with
so you gotta keep it targeted..it's not gonna be of any use to pitch some multimillionaire hairdressing magnate to join your startup..or a family friend who "knows about business"

**Gaulkin** · 01-30-2008 01:28 AM

Thank you very much for all your advice.

**akula** · 01-30-2008 01:37 AM

good good..no worries
just jump on venturedeal.com
find some entrepreneurs, in the same sector, and in the same geography, with an exit track record, and who've closed funding from the kinds of financiers that you wanna approach
put together a mailing list and start calling these guys up, offering a meeting and a subscription to your newsletter (where you publish progress reports)
do this for 6 months (i.e. 6 progress reports) and you'll definitely have a following in your local startup community

the trick here is to give people the breathing space to passively follow your startup and decide on whether they wanna join your board, based on your signs of progress..so be smart about rationing out the good news..don't put it all in one report, or you'll run out of things to say in the 2nd report

essentially, the last point means "don't put it off". start contacting the guys as soon as possible..even if all you have is a rough concept. this way you leave your self more room to report progress...avoid the "i'll contact them when we're bigger" rubbish. it's counter productive.

**Gaulkin** · 01-30-2008 01:41 AM

Sounds good, thanks

**rogercbryan** · 01-30-2008 08:27 AM

Gaulkin- I noticed your website JunkOnWheelz | Junk Removal | Debris Removal | Trash Removal and I was wondering if you work in vehicle salvaging or recycling and what area you operate in. I run a national recycling program for junk cars and thought maybe we might be able to work together.

Sorry off topic….

**Cole Taylor** · 01-30-2008 10:32 AM

Gaulkin,

I think you're getting solid advice the only thing I personally would do, and have done, is to wait until you've planned out your venture a bit before hitting up prospective advisors.

That doesnt mean you have to have a full blown business plan or investment package, but it helps. At minimum, wait until your pitch is rock solid. You're going to need to sell the advisors. They want to be involved in winners. The good news is that the advisers will help you secure financing in two ways: one, they add "sizzle" to your deal, being industry players. Two, they have great contacts.

Also, since you plan on taking on outside investors you're able to entice advisors with stock. Most agreements I've seen are three year agreements with vesting over the term of the contract.

Either way, good luck.

**Gaulkin** · 01-31-2008 09:39 AM

Originally Posted by rogercbryan

Gaulkin- I noticed your website JunkOnWheelz | Junk Removal | Debris Removal | Trash Removal and I was wondering if you work in vehicle salvaging or recycling and what area you operate in. I run a national recycling program for junk cars and thought maybe we might be able to work together.

Sorry off topic….

No i dont do cars, but i was thinking about adding it to the list of things we remove.

Originally Posted by Cole Taylor

Gaulkin,

I think you're getting solid advice the only thing I personally would do, and have done, is to wait until you've planned out your venture a bit before hitting up prospective advisors.

That doesnt mean you have to have a full blown business plan or investment package, but it helps. At minimum, wait until your pitch is rock solid. You're going to need to sell the advisors. They want to be involved in winners. The good news is that the advisers will help you secure financing in two ways: one, they add "sizzle" to your deal, being industry players. Two, they have great contacts.

Also, since you plan on taking on outside investors you're able to entice advisors with stock. Most agreements I've seen are three year agreements with vesting over the term of the contract.

Either way, good luck.

Thanks for the extra advice.