The views expressed by Entrepreneur contributors are their very own.
As a founder, building the right team is essential to lasting success. But the right team isn’t all the time what we think it is, and the unsuitable one might be detrimental to a startup at best and disastrous at worst. In fact, in his 2021 article in Harvard Business Review “Why Startups Fail” Tom Eisenmann, Howard H. Stevenson Professor of Business Administration, notes that “a wide range of stakeholders, including employees, strategic partners, and investors, can all play a role in a venture’s failure.” Simply put, the “dream team” can end up to be a wolf in sheep’s clothing.
A critical element of this group ought to be a wealth of experience in this area, in addition to a high degree of self-awareness, emotional intelligence, and maturity in the field. Strong advisors may even integrate well with the cultural and leadership dynamics of the startup—aligned with the founders’ visions—and provide an unbiased and informed perspective, offering guidance on integral decisions.
For founders, the need for strong early-stage advisors is more evident today than it was five years ago. A fast look at Forbes 30 Under 30 Venture Capital 2024 it’s clear that many founders are now getting funded relatively early in their careers, without reference to a series of previous ownership cycles. And there’s a lot at stake: According to Cardthe median early-stage enterprise capital seed check in 2023 was $3.1 million, requiring more founder-driven financial responsibility earlier. Products, meanwhile, are becoming more specialized and complex, requiring higher levels of experience. All of this could increase the rate of burn based on progress while shortening the time horizon for success.
All of those aspects make it even more essential for founders to discover and recruit advisory boards early on, and once they do, have to Do it right.
Here are the top ways to attract, hire, and retain the best employees.
1. Understand the puzzle and discover the missing pieces
Every business is unique, with its own strengths and weaknesses. A 20-year-old founder could also be very smart but lack the experience of building multiple corporations and the essential years of development related to the topic. An industry veteran, meanwhile, could also be less familiar with the behavior of the next generation of consumers. As a founder, it’s essential to assess the early landscape of your organization—discover areas of strength (the same traits that likely led others to invest in you), spot gaps, and hire advisors with specific, relevant expertise to address them.
2. Develop a consultant-specific compensation system
A founder could also be inclined to formalize an advisory team only when the company is large or mature enough, and as a substitute could also be inclined to create an informal team of early-stage peers who offer services and support for free. While this will buy time and lower your expenses/dilution in the short term, the reality is that it will ultimately lead to lower value added during the critical early growth period. A greater move is to create a compensation system for the advisors—from the outset—so that the team feels truly invested in the company and, in return, might be held accountable. This could include a percentage-based equity grant and a related timeline (normally one to two years). The amount to be awarded depends on two aspects: the value added by the advisor (time and experience) and the stage of the company (the earlier, the higher the grant).
3. Create a mutually agreed upon list of goals
As a founder, the more clarity you provide to your advisor, the more empowered they can be to add value. That’s why you and your potential candidates should create a set of goals and expectations before signing on. The latter could include an estimated variety of hours to commit monthly, required attendance percentages, and general availability for advice and reference calls. A goal statement can be more like a general job description or job overview. It may even outline the critical areas where the candidate plans to add value, along with a roadmap of how they plan to do so.
4. Introduce your advisory team members to each other and communicate steadily
Once a team has been identified and hired, it is essential to hold a meeting where members can get to know each other. The more each person feels a a part of the team, the more committed they can be. It is also essential to keep in mind that the sum is greater than its parts: a multi-person brain trust normally results in members developing higher solutions than if they were working independently.
In addition, ensure structured communication cycles (with updates) that provide realistic assessments of the current state of the company’s endeavors. Beating around the bush about a difficult experience will only make it harder for the consulting team to add critical value.
5. Continue to evaluate your team and don’t hesitate to make changes
As founders, we will turn into emotionally attached to advisors; after all, they are mentors, advocates, and stewards who have helped raise and nurture our “baby.” But as that baby grows, needs naturally change. The company may grow in size, change product categories, or adapt to a latest vertical partnership. Some advisors may give you the chance to grow with you, but others may not, so they need to be evaluated in a structured way. The right team isn’t all the time just available one.
Looking at today’s founder from a 21-year perspectivesaint-age, we remind ourselves that no single founder or group of individuals can do every little thing. But that does not change the market demand and expectations associated with it. Since success is almost all the time at stake, a properly formed advisory team is often a fundamental ingredient for lasting success, provided it is built the right way.