SURGE Blog about surrounding your company with an informal board of advisors to help you breakout and scale.

1. The Power of an Informal Board of Advisors
by
Kirk Coburn
Founder & Managing Director, SURGE Ventures
(For Copy with Audio, Please Email Me)

2. About Kirk Coburn
★Founder & Managing Director, SURGE Ventures
★SURGE is leading seed stage venture fund and mentor-driven
accelerator for Energy Technology Entrepreneurs
★Founder of 3 Successful companies Prior to SURGE
★Founder and CEO of Chief Outsiders (acq. 2010), named
the #6 Fastest Growing Company in Houston and was
noted as one of Inc’s 5000 fastest growing companies in
the US in 2014.
★ Prior to Chief Outsiders, Coburn launched The PGA TOUR
Network on Sirius XM (acq. by SIRI). He remained CEO for
four years from launch to successful acquisition.
★Spent 8 years at Dell during the 1990s in senior roles
including strategy, procurement, marketing, and finance.
★Loves the Outside!
kirk@SURGEVentures.com
Read my BLOG @ SURGEVentures.com

3. Agenda
* The Business Case for a Board of Advisors
* Case Study: HappyLawn of America
* What Kind of Board Is For You
* Strategic Board Best Practices
* Peer Board Best Practices

4. DO YOU NEED A BOARD OF ADVISORS?
Four Questions:
* What are the three or four biggest challenges in your
business right now? (What keeps you up at night?)
* How do you handle stress?
* How has your business changed over the last three to
five years?
* Where do you get your best counsel and advice, in
terms of driving your business forward?

5. WHY YOU NEED A BOARD OF ADVISORS?
Comments from fellow Entrepreneurs & CEO’s:
“I felt I had reached my current natural limits on learning how to be a
CEO, was not getting enough”
“My advisory board is responsible for driving 85% growth in revenue the
first year and 35% the year following.”
“Running a business is simply easier if you have some help and
advice from a group of trusted individuals dedicated to seeing you
succeed.”
“I determined that I wouldn’t have made my 3 biggest mistakes in
my company if I had myself accountable to a group of experienced
businessmen who I respected.”

6. WHY YOU NEED A BOARD OF ADVISORS?
YOU are in good hands…others that have proven
the model

7. Case Study: Happy Lawn of America
Situation: Barrett Ersek had a US$2.2million dollar lawn care company that
seemed to be stuck – he could not grow his company at a rate more than 5-
10% per year.
Problem: Barrett could not see past the industry’s key bottleneck, the cost of
the long & complicated sales process
Solution: Barrett created an informal board of advisors. Out this came an
assignment, “Think about your biggest bottleneck, solve it, and if possible
think of a way to improve the process or product in a way that would give us
10 times the advantage over our competitors. Solve that and you will win in
your business.” His advisors helped him find an “X” factor.
Result: Barrett had developed a proprietary patented selling process that
allowed the company to grow rapidly from no sales in 2004 to US$10million
by year-end 2007. Today, operations cover Northern Virginia all the way up to
Northern New Jersey, USA.

8. FORMAL OR INFORMAL?
The recent Sarbanes-Oxley Act imposed on public
companies has soured private firms on
having a formal Board of Directors.
“ The biggest loser in Sox: the small and medium
businesses that create over 90% of jobs in the U.S.” –
Tom Meredith, key Dell Architect, former Motorola CFO
Don’t give your advisors the fiduciary responsibility of a
formal board. It does not align with your main objective:
helping you grow!

9. 2 TYPES OF INFORMAL BOARDS
Strategic Boards Peer Based Boards
Definition
Strategic Boards are what most would
consider to be a “Board of Advisors”. This
board should consist of strategic influencers
that can individually help your business
succeed where you are weak.
This is a board made up of peers. At
SURGE, this consists of fellow founders of
other Energy IT companies that meet
together to resolve and learn from one
another.
Purpose
This Board exists to advise your company on
strategic matters similar to a President’s
Cabinet. This board should be made up of
key business leaders that can serve as a
source of credibility and value to help the
company grow and navigate business issues.
Peer Boards are put together to help the
entrepreneur succeed and grow
professionally and personally. This is the
place that an entrepreneur can go to
discuss the deepest issues that employees,
strategic boards, investors and
stakeholders cannot.
Pros and
Cons
PROS
Helps companies get
new customers,
serve as credibility,
raise capital, consult
on operations and
finance, form better
partnerships with
stakeholders
CONS
Not a great place for
an entrepreneur to
let his or her guard
down on personal
failures/concerns.
Must be on “A” game
when managing
PROS
Helps entrepreneur
manage the “X”
factor: finding
ground breaking
strategies. Place of
safety for
entrepreneur to
learn without fear
CONS
The entrepreneur is
not truly
accountable to the
peer based board
and cannot rely on
board to help
execute

10. COMPENSATION
STRATEGIC BOARD:
* 0.25% to 1% of your equity per person
* Pay a Daily Fee plus Expenses
* In some cases, pay an extra Retainer for extra work
added during board meetings
* As your business becomes more successful, time to
renegotiate compensation with each advisor
independently
PEER BOARD: Join SURGE and gain access to many
other founders as part of the SURGE alumni network.

11. STRATEGIC BOARD: HOW DO I CREATE ONE
How do you attract an Advisor?
* JUST ASK and KEEP ASKING
* Make sure you test drive them for 90 days and ensure
alignment in strategy, style, and most importantly, core
values (just like employees otherwise you will suffer from
“Culture Debt” as described by HubSpot Co-founder
Dharmesh Shah)
How many should be on the Strategic Board?
* Find where you are weak, and get someone to be on the
board than can offer strength
* The actual size is important. Read Venture Hacks article
entitled “Create a board that reflects the ownership of the
company”

12. STRATEGIC BOARD: WHO SHOULD I ASK?
WHERE ARE YOU WEAK?
* Energy and Utility Deep Domain Expertise
* Finance
* Strategy
* Leadership
* Marketing
* Client Services & Business Development
“I felt I had reached my current natural limits on learning how to be a CEO,
was not getting enough consistent and targeted professional development
from groups like my CEO roundtables, and felt I didn’t have time for full-time
school. How can I keep on learning in real time on real issues that I’m facing?
She went for two members first one to bolster her skills in finance, strategic
relationships and senior teams and one to support her continuing efforts in
service quality. Besides crediting them with her growth in revenues, they’ve
helped her transition the entire leadership team into new roles, managed a
major trade market infringement scenario, and helped her work out their
business plan for the next 4 years.”

13. STRATEGIC BOARD: ONE FAVOR AT A TIME
Maximize everyone’s time, pick one specific action item
for each board member to pursue on their own
(Examples from Verne Harnish, the Growth Guy)
* John Cone helped Verne nail down the GE, Dell, and Southwest Airlines
benchmarking events.
* Boyd Clarke, CEO of the Tom Peters Mgt Consulting Co, advises him on
marketing.
* Bill Gladstone, one of the top author agents in the country, is working with
Verne on a potential second book deal
* Ted Leonsis, Vice Chairman of AOL and investor in Gazelles, was key to
securing a relationship with Fortune Small Business magazine
* Arthur Lipper, former owner of Venture Magazine, is helping Verne get some
business in Singapore

14. PEER BOARD: HOW DO I CREATE ONE
How do you attract a PEER Advisor?
* Join SURGE
* Find the best organization that fits your personality and
business need and JOIN. Leading Peer Based Board
organizations include:
- EO: Entrepreneur Organization (www.eonetwork.org)
- YPO: Young President’s Organization
- Vistage
- CEO Roundtable
How many should be on the Peer Board?
* Between 6 & 10
* Less than 6 members there isn’t sufficient
experience in the room to ensure each member benefits
from the Forum. Over 10 becomes too crowded

15. PEER BOARD: SIZE CONSIDERATIONS
Advisory Size Pros Cons
When there is a
small number of
members
· The intimacy level can grow
stronger more quickly because
there are less personalities
involved.
· It takes less time to go around
the table during exercises.
· It can be easier to achieve
consensus with a smaller group.
· When one person is absent,
the value of the Forum
meeting is more significantly
impaired.
· There are less experiences
and knowledge to be shared
around the table.
When there is a large
number of members
· When one person is absent, the
value of the Forum meeting is
not significantly impaired.
· There are more experiences
and knowledge to be shared
around the table.
· It takes more time to go
around the table during
exercises.
· It can be more difficult to
achieve consensus with a
larger group.

16. PEER BOARD: KEY TENANTS
Best Practices from over 7,000+ entrepreneurs
generating over $101 billion in revenue, employing
over 924,000 people
* Safe Environment of Confidentiality
* Non-Solicitation
* Protocol of Gestalt, Experience Sharing

17. PEER BOARD: THE LIFE CYCLE
Level:

Casual

Connection

Commitment
“The 5%”
Content
Safe subjects they
would discuss with
casual acquaintances
Real life dilemmas they
would only discuss with
a few trusted confidants
Things they may not
have ever discussed or
thought about
Environment
Low trust; few risks,
low commitment, no
emotional investment
Acceptance, openness,
trust and respect
Members share their
vulnerabilities openly
Feelings
Mild anxiety,
optimism, excitement,
and potential distrust
Caring, comfort,
confidence with group
Highly emotional,
strong acceptance &
commitment
Sample
Presentation
Topics
New product line,
office relocation, H/R
benefits, new workout
regimen, hiring new
sales people
Partner problems,
strategic planning,
family issues, health
problems, life balance
Overwhelming
business loss or
challenge, fear of
failure, impending
divorce, depression,
etc.