Many new and fast growing private company leaders want help seeing what’s around the corner. Public company CEOs gain advice from their board of directors and the consultants they hire. The alternative for private company CEOs is to engage expert or well-connected advisors and compensate them with equity or options to be paid off when (and if) the company is sold or taken public. I’ve sat on several advisory boards over the last two decades. They can be a great experience, but only if you are selective and willing and able to put in the required time.
I’m sometimes asked about the benefits and limitations of advisory boards for company CEOs, and how to get the most from that investment. I tend to give the same advice: A neglected advisory board is like an untended garden. It produces little value.
However, rather than only share my opinion, I thought readers might find value in the advice of platform and social network CEOs and other thought leaders. Here is what they advise:
Hasan Ahmed, COO GigVistas “By adding an advisory board, we can expand our network reach. Advisors bring in additional expertise , question our assumptions and validate our plan. A strong advisor strengthens our brand. But we need to be cautious to ensure that the advisory role doesn’t turn into a reporting role (as in board of directors). Startup’s have to pay through their equity mostly and this can be expensive.”
Jason Posel, Founder Greenlight.ai “For platforms, advisors depend on stage and task. Early stage startups need to augment their expertise. If you can build a platform but don’t really know the space, get advisors who can accelerate your learning curve and introduce to you to other important contacts and colleagues. If you are from the industry then get advisors who can help you navigate the VC world.”
John Brodie, Non-Executive Chairman, Gigged.ai “Having been part of many advisory boards in the past, myself and the CEO of Gigged.ai agreed in November last year to build an advisory board to support us as we scale. The benefit is that we gain invaluable insight from a diverse group of leaders from across the globe on a regular basis. We decided to to start with selecting 4 individuals with experience in areas where we are not experts such as Cyber Security, Product Leadership, HR as well as deep expertise in building Freelancer Communities. We have found that we need to be respectful of time so we have decided to meet with our advisory board every 3 months and share 2-3 key topics that we would like to discuss. Then ensuring that an open and honest discussion is had in no more than 90 minutes.”
Ian Teperman, Head of Product Seeds “Inviting advisors to mentor our leadership provides us with a valuable source of experienced advise, inspiration as well as ambition to fuel Seeds’ growth. We divided our advisory board in 3 key roles: a thought leader of the future of work, a serial entrepreneur and a b2b sales expert. They do not only encourage us to think big and shape Seeds long-term vision, but they are hands-on participating in key meetings and connecting us with their network.”
Kenny Hanson, CEO MentorPass “The best way to build an advisory board is to break your mission down into objectives and identify gaps in achieving those objectives. Find advisors as needed to fill those gaps. Be specific about the results you need to achieve and the role they need to play. Be realistic. Reward them and make sure equity has a vesting schedule.”
Niclas Thelander, Co-founder Outsized “We recently appointed our first advisory board member but not yet gone beyond this. I think we have done it well in terms of setting clear expectations on both sides, and that is my advice. For an advisory board to bring value, expectations from both sides need to be clear and explicit e.g., what exactly is the role of the advisor, what are the deliverables, time commitments, compensation, etc. Don’t fall into the trap of ‘we need an impressive name on our website’. Having a thoughtful strategy to create a win/win for the platform and for the advisors is essential.”
Peter McPartin, Co-founder Indielist “Overall what we get from great advisors is ‘wisdom’: (1) The customer or client perspective on our value proposition – Is it clear? Do we provide real value? (2) Helping set new horizons for the business – How might we scale? New markets? (3) Keeping focus on the things that matter and challenging us to remain on course, and (4) Adding insights from related industries which help shape our thinking.”
Louise Doorn, Founder, Maas “List topics you need advice on. Ask highly regarded professionals with relevant experience and network. Be specific about what you expect, write it down, and agree on a number of hours each month. Grant a small equity piece with a 2-year vesting schedule. Include them in your investor updates and connect them with each other. Meet up over drinks or coffee for real honest feedback.”
Elina Jutelyte, CEO FreelanceBusiness “Since Freelance Business’s mission is to drive awareness of the freelance economy and facilitate a knowledge exchange between freelancers, its important to have the correct representation of freelance economy players in my advisory board, for example, representation by a freelance platform, a collective, a corporate freelance talent recruiter, a supplier of products or services to freelancers, a media representative, lobbying group, a co-working and co-living representative, accelerators, etc.”
Runar Reistrup, CEO YunoJuno “The way we at YunoJuno have approached the enlisting of advisors is most often as door openers or gap fillers and we view advisor roles either as permanent or part transient. We have permanent advisors in the evergreen areas of international expansion and fundraising, whereas we might enlist transient advisors on topics relating specifically to hurdles we are trying to overcome such as particular regulatory or product challenges.”
Bill Allen, Board Member and Former CHRO, Maersk and Macy’s “Advisory Boards are a rich vein of talent that can be very valuable if developed and used properly. First, ask yourself “what do we not know and must know and how can we find someone who knows that space well. Make sure this expertise is essential to your investment thesis. Second, find the person through your network. Finally, reward the advisors appropriately (you need not go overboard) and always be extremely respectful of their time.”
Matt Dowling, CEO FreelancerClub.Net “Although I sit on advisory boards for other startups, we have a different take on them within Freelancer Club. Our “advisory board” is unconventional. Rather than a team of external experts, our advisory board is made up of our leading freelance members, and we ask their options on a range of topics. We use a dedicated Slack workspace with channels including ‘feature suggestions’, ‘beta testing’ and a general ideas forum. The “board” ensures we are building products that our members want rather than what we think they want. We create a new channel for each topic and archive it after a few days to keep it clean and efficient.”
Victor Hoong, CEO Riverflex “We don’t have an advisory board yet. However we have a good network of people around us and ask them for guidance time to time. This includes senior people at former or prospective clients. The good thing about it is the range of perspectives instead of just one point of view. We are all trying to be customer centric; hence, the client advisors are very important to us in pointing out our blind spots.”
Gabe Greenberg, CEO G2i “G2i wouldn’t be where we are without our advisory board. They’ve filled knowledge gaps and helped us grow faster than we were able. We’ve chosen advisors based on specific pain points; for example, how to ramp up demand generation. We were introduced to an advisor in our network that helped us hire our first marketing manager and works with us as needed. He now sits on our advisory board.”
Hans -Ulrich von Freyberg, CEO Vicoland “I believe advisory boards should be multi-constituency. That’s more stakeholders than one might think at first sight. Apart from the evident constituency of freelancers, it should involve clients as well as stakeholders from the staffing industry, e.g. MSPs or VMS providers. I also believe an advisory board benefits from legal know-how (esp. labor, insurance and commercial law) as well as academic insight. The problem when it comes to clients, VMS, MSPs and the like is that they are competitors of others you also want to work with as a platform. Solutions can be non-public boards or board committees or, on the contrary, open access boards. Lots to be learnt, at least for us at Vicoland.”
Gabriel Luna-Ostaseski, Co-founder Braintrust “It’s helpful to have thought partners on particular areas of the business. I separate three core roles: super advisors, advisors, and mini advisors/credential-izers. These each come with different expectations of involvement, different advisory grants, and different areas of expertise. Last, set clear expectations and put it in the advisory agreement. If this isn’t clearly spelled out you run the risk of lots of advisors but not getting the guidance you need.”
Christophe Harte CEO Comatch “Our main investors joined our advisory board early on. Most had worked as consultants during their career and we benefitted from their experience. Later we added someone with a strong corporate leadership experience which we were lacking . Our business is built on the premise that external advice can make all the difference and it is fair to say we wouldn’t be where we are today without our advisory board.”
Ömer Güven, CEO & Co-Founder Fintalent “Advisory boards are an important sounding board. It’s important for advisors to have a stake in the company, and be committed to what you are building. Advisors should provide insights that go beyond a sectoral overview. To be helpful, they need to be able to contextualize your venture within their domain knowledge, embrace your company’s values and principles to tailor recommendations, and understand how you approach and work through problems. Finally, it is important to keep them engaged and involved with the company, feeling valued, and leverage their network and knowledge more frequently than on just a bi-annual or quarterly basis.”
What’s the takeaway?
In my conversations with these leaders, there are three take-aways. First, they benefit from access to advisors who are experts and well-connected in key domains. Selecting the right people, the second point, is make-or-break. They also say that the right people will change as the platform matures and grows: unlike love, advisors aren’t forever. But there are general rules in selection like: expertise in a high-need domain of the business, enthusiasm for the business and company, reasonable availability, and good chemistry with the CEO and leadership team, and other advisors with whom they’ll interact.
If you want a productive advisory board, its ultimately up to you, CEO! The best advisors know their value, take advising seriously, and are selective in where they invest their time and expertise. They want a relationship with the platform, the chance to contribute meaningfully, and are unlikely to stay long where the advisory board isn’t active, or their participation isn’t regularly sought out.
Viva la revolution!
HR thought leader, author, teacher and early stage investor. Writing about the freelance revolution and the future of work. Books include HR From the Outside In, HR