I have recently accepted an Advisory Board position at a young company called The Elite Sports & Academic Management Group Inc. Their website is under construction but they are a firm that was established about seven years ago initially focused on running soccer camps and leagues in the area. In the past several years, they have expanded to include several major sports, academic tutoring, athletic agility training, and one-on-one coaching for college admissions with plans on building a world-class sports and educational facility. The company mission is to ensure and support the success of the amateur student-athlete to college and beyond. Although I typically do not accept advisory board positions unless I believe the company has a chance to reach the public markets, I have worked with this entrepreneur before and he has the passion to build it into a lasting enterprise.
I mention this because I have recently read a post by Ed Sim of Dawntreader on Advisory Boards. I too believe that many startups come masqueraded with a bogus advisory board. In this example, I have agreed to provide services to help the company grow with the option of investing institutional capital if the company meets certain thresholds. In addition, I am accepting a small piece of equity for this. If you haven't read some previous posts, this situation is what some people call Advisory Capital - it's what I call "The VC Who Has No Money".
One thing that I want to mention is that while the entrepreneur may plan on filling his Board of Directors or Board of Advisors with high profile individuals who may elevate the prestige and legitimacy of a company, it is important for an Advisor to only associate with top notch enterprises. Part of being a VC or Advisor is helping companies succeed. If a prospective entrepreneur does his due diligence on you and finds that you are on too many boards or have been on many boards of failing companies, then he might just go to the competition. So at every stage of the game, you must watch your resume and your track record. For those who think being a VC is a piece of cake, think again.
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