Entrepreneurs need to cautious when forming their boards, as selecting what people will be part of that committee — be it advisors or directors — can make or break a company.
After 13 years of running my own company and being active on several boards, as both an advisor and board member, I have learned a lot about the importance of surrounding yourself with the right set of advisors. Selecting your board is a critical activity that will shape the course of your business. You want to have similar beliefs and values, a common goal and vision but enough differences to balance each other out.
Here are some of my tips and criteria for entrepreneurs who may be embarking on the – sometimes misunderstood — task of identifying the right people for their boards.
1. Are they actively engaged?
In selecting a board member, it’s crucial to evaluate how engaged and excited the individual is about your company and your work. This will be a key indicator if they will be a valuable voice on your team and will bring ideas and enthusiasm to your business. People who share a passion for your company’s mission and what you have set out to do are more likely to care and act on your company’s behalf.
2. Do they have a strong network?
I’m always thinking about how I’m extending my own network. Have I widened my circle from a year ago? Five years ago? The right board members can help you do that. It is important that board members have a strong network of connections across various industries and markets. You want to ensure your board can introduce you to interesting and relevant people to help successfully propel your business forward.
3. Are they savvy with fundraising?
Board members who have had success in raising capital and know how to play the game when talking with VCs and other potential investors are critical. It reinforces that not only do they understand your business, but they also understand the steps to help move it forward. They understand what gets an investor to sit up and pay attention, and what parts of your strategy they may poke holes in.
4. Do they help fill your knowledge gaps?
Your board should be diverse. It is vital to evaluate the unique skills and characteristics each person brings to the table to have a well-rounded team. Think about a balance of men and women; people who have run both small and large companies; those who have strong skills in marketing, sales, business development and operations. It will help round out the conversation and perspectives in the room.
5. Are they available and responsible?
In choosing board members, many new entrepreneurs are eager to add big names to their board, but you want to make sure the people you are adding have the time to fulfill their duties and meet the needs of the company. While it’s great to have that “big name” you can announce as being part of your team, it’s not as great if that person isn’t present or available to actually deliver value to your business and its growth.
As is the case with everything when it comes to running a business, your direction and needs will evolve and change over time, so you can’t forget to constantly re-evaluate your board to see what might be missing and fill in the gaps as you go.