By Auren Hoffman
The other area in which advisers were invaluable was helping us to source deals. Almost all of the major customers we secured at BridgePath were referred either directly or indirectly by those former executives in the industry whom we were lucky enough to have on our advisory board.
KEEPING IN TOUCH. Since the advice from 20,000 feet is coming from people who are likewise as far removed from your company, you need to contact them at regular intervals. While not exceeding your promise of a commitment of no more than two hours a quarter, don't make the opposite mistake of not calling them at all.
At my companies, I made it a point to "touch" each adviser at least once a month -- for example, with an e-mail updating them about a new product introduction or a recent hire. Then, once a quarter, I made good on my pledge to call them individually. I always had something in mind that I figured could use their perspective. In doing so, I was able to avail myself of 300 years of experience -- 10 advisers, each with 30 years in the business -- during the course of a smattering of phone calls. Your advisers will tell you if you are calling them too frequently. Conversely, they won't say anything if you aren't utilizing them enough. They will just feel slighted and unappreciated, which you shouldn't let happen.
Finally, remember to thank your advisers -- often. Let them know their advice is valuable and that you are listening. Like any important relationship, make sure you let them know that you need them.
When it came time to sell BridgePath, it wasn't the advisory board that I turned to, but rather the board of directors. At this stage, advisers are not as much help, because you need people you can call all of the time during a lengthy and drawn-out process, and also because the information is likely be sensitive.
CLOSE AND PERSONAL. Some of our advisers were people we couldn't inform about a potential sale because of their positions in the industry. At most, we were able to use them for high-level advice, such as which companies might be likely buyers. Indirectly, however, our advisers might have played a role by giving us good references when buyers called them for information about us. I know that I called the advisers of our interested buyers for their opinion about those companies.
At this stage, directors step up to the plate, spending the considerable time necessary to bring about the desired resolution. At BridgePath, we had a deep and experienced board of directors. One of our board members would even talk to a counterpart at the interested company. This pairing of the right personalities allowed for the free exchange of information that enabled both sides to determine whether there was a "fit."
Largely because we made good use of our boards, we were able to sell both companies -- BridgePath to Boston-based Bullhorn, which sells front-office software to staffing and recruiting firms, in 2002, and GetRelevant to Lycos, also in 2002.
At the formative stage of each, we availed ourselves of the best information from 20,000 feet to build the companies. Then, when we were ready to sell, we turned to the perspective from 200 feet. Thus, it was the interplay between our executives and our advisers, and then between our executives and our directors, that made for the happy outcome all entrepreneurs desire.
Auren Hoffman, 29, is a serial entrepreneur who founded and currently serves as chairman of the Stonebrick Group, a San Francisco-based investment firm.
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