Sam Cronin is the digital health investment manager at Arkin Holdings<\/p>\n
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We notice that what entrepreneurs often need, especially at the earlier stages, is access \u2013 access to information, access to advisors, access to customers. One way to do this is to go out and do the leg work yourself \u2013 highly inefficient (usually!). You risk wandering the desert for 40 years and throwing away the most valuable resource you have as an entrepreneur (and a human being): time.<\/span><\/p>\n <\/p>\n Another way is to hire a \u2018rockstar BD\u2019, except a) rockstars are expensive and especially in the early days of a startup you often don\u2019t have the capital (nor do you necessarily know exactly what persona you need for your BD!); and b) even rock stars have a limit to their repertoire \u2013 for example, in healthcare, most BDs skilled at selling to pharma won\u2019t know how to sell to providers or payers (and the more granular we go, the more niche the required skill set becomes), etc. I\u2019d imagine this translates to other domains too.<\/span><\/p>\n <\/p>\n Yet another way is to tap into the hive mind.<\/span><\/p>\n <\/p>\n We\u2019re <\/span>huge<\/b> fans of querying the collective experiences of the hive mind. It exponentially shortens the learning curve and the time to progress. It\u2019s the equivalent of navigating using a map hand-drawn from a single person\u2019s memories, versus using Waze.<\/span><\/p>\n <\/p>\n Your advisory board is essentially a highly curated, business-focused navigation system for the CEO, assembled so that amongst them all they either have the answer, can probably help find the answer, or can make a warm intro to whoever might have the answer.<\/span><\/p>\n <\/p>\n So what does that mean and why build one?<\/strong><\/p>\n <\/p>\n When built well, your Advisory Board can act as an extension of your core business-facing team (i.e. CEO, VP BD, etc.) and deliver outsized value. These are senior, respected and connected figures in your sector, able to offer you as much internal value (i.e. strategic thinking) as external (i.e. networking and promoting). In an ideal world they\u2019ll have domain expertise, global business expertise, and a list of contacts and customers that would make any competitor envious.<\/span><\/p>\n <\/p>\n The result of this? Imagine if you could take everything you think you\u2019ll know in another 25 years of professional activities and put it into your brain today. Then multiply that across ~4 different, incredibly rich and diverse lives and successful careers, with broad networks that reach to your strategic customers. Then put that knowledge and those networks at your disposal, there to help accelerate anything you\u2019re trying to achieve, make warm intros, etc. \u2013 whilst simultaneously challenging you from their vantage point.<\/span><\/p>\n <\/p>\n That\u2019s why you want an advisory board.<\/span><\/p>\n <\/p>\n What is it not?<\/strong><\/p>\n <\/p>\n Just to note, an advisory board does not equal advisors. Let me repeat that: <\/span>an advisory board does not equal advisors<\/b>. Almost every pre\/seed deck (especially if the science is more complex) lists \u201cadvisors\u201d \u2013 these are almost always not like an advisory board. These are often figures that are there by happenstance (e.g. the PhD advisor of a founder, the friend who had an exit in a totally different space, a marketing expert, etc.) and placed there to seemingly add credibility to the venture. Most of the time they don\u2019t add the credibility you think they do and, because you\u2019re a poor startup, you\u2019ve often given away valuable options.<\/span><\/p>\n <\/p>\n Persona and profile<\/strong><\/p>\n <\/p>\n Finding people at the right level is challenging, especially for an early-stage company. It\u2019s hard to say that there\u2019s a <\/span>right way<\/span><\/i> to build this but here are some points that might help in determining the right personas and targeting the right people:<\/span><\/p>\n <\/p>\n <\/p>\n If you\u2019re in a space that\u2019s science-heavy (e.g. healthcare, quantum computing), don\u2019t settle \u2013 find the scientists who have done business or at least commercialized their research, or the physicians who have built something, etc. It\u2019s not a rule but more often than not, the right people will not be Israeli \u2013 since we\u2019re always building for foreign markets, find people who have lived their careers in those markets.<\/span><\/p>\n <\/p>\n Compensation<\/strong><\/p>\n <\/p>\n This is a challenging one \u2013 there\u2019s a reason many startups give options to their advisors rather than cash: they don\u2019t have the money. But it\u2019s a little hard to motivate someone to perform at their best when you\u2019re offering them Monopoly money. The usual balance is a combination of cash and options. As mentioned earlier, cash shows them you value their time in the short-term while they still get to know the company and prove themselves, whilst the equity is what keeps them motivated for the longer-term.<\/span><\/p>\n <\/p>\n One strategy is to start off paying them as an advisor and setting various KPIs to determine what happens after e.g. 6 months. If you split the payment between cash and options (of course, with a vesting period) it gives you some time to work out whether you\u2019re getting value from them that\u2019s worth cash, or whether you\u2019re getting value that\u2019s worth 0.1-1% of the soonicorn you\u2019re working on.\u00a0<\/span><\/p>\n <\/p>\n How do you build one?<\/strong><\/p>\n <\/p>\n Short answer? Slowly and carefully.<\/span><\/p>\n <\/p>\n Final words \u2013 putting our money where our mouth is<\/strong><\/p>\n <\/p>\n We recently announced our own Advisory Board. We\u2019ve been quietly working with them for a while, and it is an outstanding experience. It took some time to build and not a small amount of work \u2013 they\u2019re titans (and we don\u2019t use that term lightly) of US healthcare. They\u2019ve all had incredibly successful careers, curry deep respect across the industry, and have probably forgotten more than I\u2019ve learned.<\/span><\/p>\n <\/p>\n There\u2019s no substitute for knowledge, experience, and relationships, and done right it can be like turbocharging an engine.<\/span><\/p>\n <\/p>\n","blog-lang":"English","_yoast_wpseo_focuskw_synonyms":""},"homepage-strip-tag":[],"startup-stage":[],"main-taxonomy-mobile":[],"blog-lang":[669],"zoom-in-tag":[629],"event-status":[],"class_list":["post-9004111222487893","blog","type-blog","status-publish","has-post-thumbnail","hentry","blog-lang-english","zoom-in-tag-entrepreneurship-ww"],"acf":[],"yoast_head":"\n\n
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