Frequently Asked Questions

Should we have an advisory board? If so, who should be on it?

Many, but not all, startup founders use advisors to provide guidance in the early days of a company. Advisors can be very useful for two purposes:

  1. Advisors can help supplement the skills, knowledge and connections of the founder, and
  2. Advisors can lend their credence/prestige to a company.

If a company's founding team is missing crucial knowledge or connections to get the company to the next level, bringing on an advisor with such knowledge or connections can be a relatively inexpensive way (in terms of both time and dilution) to acquire such knowledge or connections. Advisors are typically paid a small percentage of the equity of the company and provide between a few and a few dozen hours of support each month.

Having prominent individuals on a company's advisory board can often boost the profile of a company. This is especially true if a company is working in a very specialized space, such as biotech, where having a scientific advisory board might help convince investors and customers that the company has been vetted by people who know the space.