Key Question:
A: Don't try to start and grow your business alone. Surround yourself with experienced business people by forming a board of directors or board of advisers. While directors can be legally responsible for the finances, advisers are not. You choose if you want the formality of a group of directors or a more casual group of mentors.
Q: If a board of advisers is so important, why are there more businesses without a board than with one?
A: Most entrepreneurs seek advice but they don't form a board of advisers because they think they don't have time, they think no one would want to help them, they think they have to pay for the help and they don't have extra cash, or, they are simply independent and don't want anyone's advice.
All of this thinking is shortsighted because no one individual can accomplish as much alone as they can by taping into the wisdom someone has gained from experience.
Q: Are the members of TEN required to have a board of advisers?
A: Yes. The entrepreneur looks for advisers but Dan and other staff people at TEN help the entrepreneur find board members who will invest money in the company and who will give time to attend board meetings and guide the company's growth.
A Board of Advisers can expedite the decision-making process and it can also provide a fair-minded forum for discussion that is devoid of family or company politics. A Board of Advisers can do the following:
1. Assistance in dispute resolution over operational and strategic issues
2. A sounding board for new ideas and problem solving.
3. Access to an independent benchmark on the company.
4. Additional business expertise for the company.
5. On another level, an outside advisory board that has suggested or sanctioned major strategic initiatives and/or significant financial commitments may be a source of comfort. The advisory board's "thumbs up" may give company officials peace of mind that they are following the right course.
When selecting the board members:
1. Avoid choosing personal associates professional peers will be far more objective and effective.
2. Select advisors who have experience in the area where your company is headed. Because they were successful in achieving similar goals, they can mentor your company and provide invaluable advice.
3. Focus on candidates with diverse experience and remember that chemistry between the owners and advisors is also desirable.
4. It is unnecessary and often inadvisable to seek advisory board members who are in your direct industry.
Also network with other professionals such as attorneys, insurance advisors, accounting firms, or other professionals who might provide referrals.
Advisers are usually paid for their time and are reimbursed for expenses. In order to provide the breadth of experience that is needed, an ideal number of advisors is three to four.
People who do extraordinary things in life have mentors. Parents start us out, but, we need others. When you see a person you want to be like, find a way to get to know them. Ask them questions--people are flattered, not offended and are usually glad to give advice.
Think about it
What business people do you know and admire? What would stop you from asking them to serve on your board of advisers? Where would you be in your life and in your business if you had several mentors guiding you through the rough waters?
Clip from: The Enterprise Network
Santa Clara and San Jose, California: Silicon Valley is famous for technology startups and its goal is to never lose the distinction of being "the place" for innovation. The Enterprise Network (TEN) houses over a dozen start-ups working to bring new technologies to the marketplace. At TEN they find low-cost office space and mentors who guide them. You will meet the men who run the incubator and a number of the entrepreneurs who depend upon the leadership and camaraderie offered here.
According to the National Business Incubation Association, there are about 5,000 incubators worldwide with about 1,100 in the US.
We chose this incubator because it became famous during the dot-com boom and it is situated close to Stanford University.
Stanford was early to the idea of technology licensing. Technology licensing has assisted faculty and students in the process of launching companies which in turn have created thousands of jobs and brought millions of dollars into Stanford University. Stanford enjoys the "success breeds success" principal so things are popping there. In this program we go to the campus to see how one PhD student is working to commercialize his discoveries.
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The Enterprise Network (TEN)
Mark Godwin, President & CEO
Access Growth LLC
2953 Bunker Hill Lane Suite 400
Santa Clara, CA 95054
408-893-4500
Visit our web site: http://accessgrowth.com
Office: 408-893-4500
Toll Free: 877-256-4500
Business Classification:
Business Incubator - NGO
Year Founded: 1993
Establish A Board Of Directors
DAN MIRICH (The Enterprise Network): We have a group of about 350 advisers that are on the . . .
HATTIE: (Voiceover) Dan Mirich helped form The Enterprise Network.
DAN: . . . system database that will come in and help these companies and advise these companies.
HATTIE: Do you think every company needs a board of directors?
DAN: Yes. Get one with credibility. And then also see the people that are directors have got skin in the game -- that they've invested in the company. And that's important. You want to have them invest in the company, buy stock . . .
HATTIE: And that motivates them?
DAN: That motivates them. And then also you can go to other people, and I'm gonna be helping them raise additional money, and I can go to other people and say, `So and so invested money.' Or they say, `Who's invested the money?' The hardest part of any company is to get the first $250,000, $350,000. Once you get that, it gets a little easier. It's never easy, but it gets a little easier, because then you'vealready got people who have made a commitment. Because everybody wants to play five- or seven-card stud and not put up any money. And this way, say, if you've got to turn those cards over, we're paying--we're playing draw, you've got to put your money in now.
