It took us 14 years to grow our business, Triton Systems, from a $1500 initial investment to over $20 million in sales then another 5 years to reach $100 million. In 1997 we partnered with Summit Partners, a middle market venture capital firm out of Boston, and for the first time established a real board. Our board included seasoned business professionals including a former president of Bank of America. In retrospect, we wish we had done it years earlier.
In our defense, until we experienced our spectacular growth surge, it was not obvious that the time had come to set up a board. Many times, our future prospects appeared uncertain and to be honest, we had our hands full just keeping the wolves at bay. I suspect that many startups, face the same uncertainty. My advice, if you are considering it—do it.
A board of advisors can help a fledgling company in many ways. First of all, startups need the objectivity that they can provide. If, after attempting to sell an idea to your own board, they remain skeptical of your plans, you have a problem. An advisory board can bring years of experience to bear when reviewing your direction and offer a sounding board to serve as a “reality check.”
Such a board can also provide an invaluable source of networking contacts and open doors for the struggling entrepreneur. Often times, a board member can provide the credibility required to get that loan or close that deal.
Many such advisors enjoy the opportunity to mentor and provided they feel that their advice is taken seriously, will serve for free. In selecting board members it is crucial to seek a diversity of experience and to be careful to avoid inviting members where obvious conflicts of interest may lie.
And for those of you who may be asked to serve on such a board, make sure to establish a term during which you will serve. It always possible to serve more than one if mutually desired, but a solid end point is a good idea for everyone to ensure that the entity is periodically infused with new blood.
I discovered this when I had served for several years on a board and, though I truly enjoyed being a part of the organization, felt it was time for me to go. It was a non-profit board, not a start-up. And while I was flattered when I got a phone call asking if I would reconsider and serve another term (it’s always easy to find work if you give your time for free, I have discovered), due to other commitments, I respectfully declined. They later emailed me that, according to the bylaws, they required my written resignation.
Here’s another tip. Apparently there are rules of etiquette in this regard. I found a two word “I quit” doesn’t work too well.
Disclaimer: Frank Wilem is an author, speaker, and all around funny and entertaining guy. On this blog, his stories are based on his real life experiences, often with a satirical twist.
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