How to Build a Board of Advisors for Your Business

About this video

Dan Martell explains the difference between a Board of Advisors (BOA) and Board of Directors (BOD), drawing on his claim of advising over 100 companies and sitting on about a dozen boards. Five differences: 1) Work focus - directors work for the corporation/shareholders, advisors work for the CEO/management team. 2) Formalities - directors are legally bound and formal; advisors are informal. 3) Size - directors ideally 3-5 people, advisors 6-8, roughly twice as large. 4) Compensation - never pay cash for a director; equity for a director is roughly half of VP-level equity, which he puts at 2.2% to 1%, on a vesting schedule, while advisors get less equity or can simply be paid their consulting hourly rate. 5) Recruiting - fill ’experience buckets’ for where the business is going in 3-5 years, and recruit by asking for advice first. He closes with his Dream 100 framework: 10 mentors, 30 advisors and 60 peers.

Key takeaways

• Directors serve shareholders; advisors serve the CEO and management
• Keep directors formal and small (3-5); advisors informal and larger (6-8)
• Never pay cash for board seats; use equity, less for advisors
• Recruit by identifying experience buckets for the next 3-5 years
• Ask for advice to start relationships that become board roles

Episode details: published December 13, 2021 · 10:18 long. Summary written by Self Growth Videos from the episode itself. Business results and any income figures mentioned are Dan Martell’s own claims, shared for education — they are not typical or guaranteed.

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