In answer to these very problems, a growing number of tech startups have begun appointing ‘advisory boards’ – teams of, or individual, non-executive advisors who work on a part-time basis, often for a fixed-term of anywhere between 12 and 36 months. It’s a trend that has been gaining momentum over the past couple of years but has accelerated in the wake of the challenges posed by Covid-19.

So how can an advisory board help your startup, and how can you attract the right advisors?

By and large, most millennial and Gen Z founders will not have led their company through an economic crisis. It’s not the sort of experience any leader strives for but the lessons learned from previous global downturns will be invaluable when facing the oncoming economic uncertainty. How can you manage risk? Should you consolidate parts of your business or let them go? Continue to invest precious pounds in engineering and platform development or focus on sales and marketing? As we approach the tail end of the virus, which markets are likely to open up quickly and which will take longer? Having a seasoned leader to turn to for guidance and advice on these issues can be critical in successfully navigating a business out of the pandemic.

It’s also not something that needs to break the bank. A full-time cohort of non-executive directors can be a costly affair and usually reserved for established medium to large sized firms who need extensive and ongoing governance. Advisory boards on the other hand can be rewarded through a number of more creative levers, including both fees or equity, often making them a cost-effective method for startups to access heavy-weight leadership skills.

Often an advisory board’s return on investment is particularly noticeable when they’re appointed to advise on sourcing funding opportunities. A background on the board or executive committee of technology companies brings not only an understanding of how to source rounds of venture capital financing, but also access to a shareholder community of investors. A link into this network has obvious value for startups looking for their first stages of series funding.

What’s more, as a tech startup develops and matures, it will invariably look to extend its reach and operations into new geographies. Advisory boards can be appointed to bring region-specific experience; a knowledge of how to market products or services in them, and an understanding of country-specific business practices and cultural nuances. It’s now not uncommon to see early-stage tech companies appoint advisory boards with a single advisor based in the UK, Europe, North America and Asia respectively.

The most value, however, often comes in the form of diversity of thought and fresh perspectives. Board advisors bring a level of knowledge to a company that it wouldn’t necessarily be able to gain (or afford) through a permanent executive appointment. If engaged to help product development for example, an advisory board can guide the CTO on development and innovation pathways or simply act as a sounding board for ideas.

Whilst this might all sound great, getting the right advisors is a key challenge. When utilised successfully, these individuals will engage with you and your leadership team and influence some of your most important decisions; a certain level of chemistry, ‘fit’ and passion for the business from an advisor is therefore paramount. Understanding a potential advisor’s motivations will help you discern who is, and who isn’t right for your organisation.

Often, potential candidates will be motivated by the opportunity to work with a technology startup with a unique proposition – an organisation or individual solving complex problems or tackling social or sustainability issues. Others may be motivated by joining a well-funded scale-up at a critical moment on its growth journey – the opportunity to help a good business grow is an attractive sell, especially for those with an investment background. Whilst others will consider an advisory position more attractive when compared to more formal non-executive director roles where the governance element is more substantial. In these circumstances, a vibrant culture, a visionary CEO with big ideas or the opportunity to take the business into untested markets can be strong selling points.

Whatever it may be, pairing these aspects with the motivations of a potential advisor will ensure you have someone who is dedicated, offers meaningful input and genuinely wants to see your business succeed.