The rate of startup failure can be disheartening. Prominent among the factors that lead to failure is the lack of guidance from experienced hands.

Startup advisors can help new businesses avoid costly mistakes and make the right decisions in tricky situations.

But it is not just enough for founders to bring on board advisors. They need to know how to get the best value out of their advisors so that their businesses can survive and ultimately thrive.

If you’re a founder looking to get some advisors, or already have them on board, here are some tips to get the most out of them.

1. Pick the Most Suitable Startup Advisors for You

When you are looking for an advisor, lean towards someone who is skilled in an area you are not good at. Consider the lessons they have learned in running their business and how it relates to you.

Much like finding a partner, they will help compensate for your blind spots.

While you may be tempted to zoom in on an advisor who excels at one particular skill you need to have a holistic view. Look for some who is skilled at passing on what they know as well.

2. Be Clear About Why You Need Them

Just like when you’re meeting an investor, you’ll need to make your case to an advisor on why they should come on board.

Since they will be taking time out of their schedule to help you, they need to see that you know exactly how they can be of help.

Show them what your startup has accomplished so far. Explain your challenges to them and then match those hurdles to the advisor’s skill set or network. That way, an advisor will focus their efforts for maximum benefit.

3. Make the Decision to Let Them In

There are various factors that might lead to your seeking an advisor. But what is common to every founder is that unless you decide to let advisors do their job they will not help you.

From the very beginning, give them permission to help you. Do not let them attend board meetings and just wait for the next update. Get them to probe deeply and ask the tough questions.

As the founder, you are the solution creator and your advisors ought to be the editors.

4. Formalize the Relationship

You need to draft a clear plan on how you will work with your advisors. Typically this takes shape in the form of an advisory board or council.

When you are designing your advisory board you need to determine the boundaries that it will operate under.

Some considerations surrounding the advisory board include:

• Will the members have a say in matters touching on business or financial decisions? If so, which specific areas will they weigh in on?
• The terms of service under which the advisory board will function

Of course, there are many considerations to keep in mind. Think this through before reaching out to an advisor.

5. Focus More on Strategic Matters

By the time you’re thinking of approaching a particular person to be an advisor, you’re probably not the only one.

If they do agree to join your advisory team, you need to spotlight the more strategic matters for your business. If you only highlight administrative issues, you will not tap into their true power.

Allow them to interact with more crucial matters that can make a big difference in your business.

6. Compensate Them

When someone becomes an advisor to your startup they are choosing to take time away from their business to help yours.

In recognition of this sacrifice, you need to create a startup compensation package that includes remuneration for your advisors.

While you can pay advisors in cash it is recommended that you do so in company stock. The equity range for an advisor falls between 0.15% to 1% depending on several factors.

Paying an advisor helps to incentivize them to keep helping your startup. Using equity ensures that your advisors are aligned with your firm’ objectives.

7. Secure a Formal Agreement

An advisor agreement is a legal document that details the advisor’s commitment to your startup. It also contains the compensation terms that you will agree on.

Without a formal agreement, your relationship with an advisor might tend to be inconsistent. In a worst-case scenario, it might fizzle out.

Although you need to formalize the relationship you should be careful when to bring it up.

Putting an advisor agreement on the table during the first meeting most times can be awkward. Meet with your advisor the first few times then bring up the conversation.

8. Strengthen Your Relationships with Advisors

A deeper connection with your advisors will often lead to better output from them. Consequently, you need to forge relationships with them that go beyond board meetings.

Plan to host your advisors to a dinner every quarter. You should make it less formal to distinguish it from your board meeting and create a congenial atmosphere.

When an advisor gives you excellent advice on a certain matter you should keep talking to them about it. As you pick their brain more, they will feel valued and open up.

9. Keep Track of What They Are Good At

As an entrepreneur, you will likely be attracted to an advisor due to their expertise in a certain area. What you should keep in mind is that such an advisor also has knowledge in adjacent areas of interest.

During your engagement with them, find out what new area they seem to excel in. You can then add this to the other areas you know they are specialized in as a way of keeping track.

If you are working with several advisors you should consider creating a database to help you bring the information together.

Let Your Advisors Help You Get Ahead

Startup advisors bring with them a wealth of experience that can help your business to grow. With the right skills, you can draw the best out of them for the good of your enterprise.

Are you looking to start or enhance your board of advisors? Aaron Vick is an experienced entrepreneur and consultant who can help you maximize the value of your advisory team. Get in touch with him today.