What types of questions should I be asking before I sit on a board of advisors for a new startup?

The previous answers given here are great, but I've copied a trick from legendary investor Monish Pabrai that I've used in previous startups that seems to work wonders -- especially if your company does direct B2B sales. Many Founders/ CEOs are hung up on having the Founder/ CEO/ President title. As others have mentioned, those titles have become somewhat devalued in today's world -- especially if you are in a sales meeting with a large organization. Many purchasing agents at large organizations are bombarded by Founders/ CEOs/ Presidents visiting them all day. This conveys the image that a) your company is relatively small (the CEO of GM never personally sells you a car) and b) you are probably the most knowledgeable person in the organization about your product, but once you land the account the client company will mostly be dealing with newly hired second level staff. Monish recommends that Founder/ CEOs hand out a business card that has the title "Head of Sales" or "VP of Sales". By working in the Head of Sales role, and by your ability to speak knowledgeably about the product, you will convey the message that a) every person in the organization is very knowledgeable about the ins and outs of the product (even the sales guys) and b) you will personally be available to answer the client's questions over the long run. I've used this effectively many times myself.

There is quite a bit of information available online about eCommerce conversions rates. According to a ton of sources, average visitor-to-sale conversion rates vary from 1-3%. This does not mean the Furniture conversions will be the same. The bigger problem is that visitor-to-sale conversions are not a good data point to use to measure or tune your eCommerce business. All business have some unique friction factors that will affect your final conversion rate. It's very important to understand each of these factors and how to overcome them. The best way to measure and optimize is to take a conversion funnel approach. Once you have defined your funnel you can optimize each conversion rate to better the total effect. For example: Top of the funnel: - All web site visitors, 100,000 / month First conversion: View a product page, 50% of all visitors Second Conversion: Add to Cart, 10% of people who view products Final Conversion: Complete Checkout, 80% of people who put items in a cart In this example we see that only 10% of people who actually view products put them in to a cart, but 80% of those people purchase. If you can figure out why visitors are not adding items to their cart and fix the issue to increase the conversion rate, revenue should increase significantly because of the high checkout rate. You can use free tools like Google Analytics to give you a wealth of information about your site visitor and their behavior or there are some great paid tools as well.

It all depends on what one decides to be a definition of a "success story." For some entrepreneurs, it might be getting acqui-hired, for some -- a $10M exit, for some -- a $200M exit, and for others -- an IPO. Based on the numbers I have anecdotally heard in conversations over the last decade or so, VCs fund about 1 in 350 ventures they see, and of all of these funded ventures, only about 1 in 10 become really successful (i.e. have a big exit or a successful IPO.) So you are looking at a 1 in 3500 chance of eventual venture success among all of the companies that try to get VC funding. (To put this number in perspective, US VCs invest in about 3000-3500 companies every year.) In addition, there might be a few others (say, maybe another 1-2 in every 10 companies that get VC investments) that get "decent" exits along the way, and hence could be categorized as somewhat successful depending on, again, how one chooses to define what qualifies as a "success story." Finally, there might also be companies that may never need or get around to seeking VC funding. One can, of course, find holes in the simplifying assumptions I have made here, but it doesn't really matter if that number instead is 1 in 1000 or 1 in 10000. The basic point being made here is just that the odds are heavily stacked against new ventures being successful. But that's also one of the distinguishing characteristics of entrepreneurs -- to go ahead and try to bring their idea to life despite the heavy odds. Sources of some of the numbers: http://www.nvca.org/ http://en.wikipedia.org/wiki/Ven... https://www.pwcmoneytree.com/MTP... http://paulgraham.com/future.html Here are others' calculations of the odds that lead to a similar conclusion: 1.Dear Entrepreneurs: Here's How Bad Your Odds Of Success Are http://www.businessinsider.com/startup-odds-of-success-2013-5 2.Why 99.997% Of Entrepreneurs May Want To Postpone Or Avoid VC -- Even If You Can Get It http://www.forbes.com/sites/dileeprao/2013/07/29/why-99-997-of-entrepreneurs-may-want-to-postpone-or-avoid-vc-even-if-you-can-get-it/

As the owner of a web development firm, I am always inventing our own digital products and services. Any service that is web-based and accessible to mobile devices work as long as they solve a business need. The digital products I wish would exist are: 1. Home building services including videos by experienced builders 2. Mail and package weighing digital services 3. More security services for document transfer services. Bruce

Avoid buzzwords: - every founder thinks their idea is disruptive/revolutionary - every founder says their financial projections are conservative Instead: - explain your validation & customer traction - explain the assumptions underlying your projections Avoid: - focusing extensively on the product/technology rather than on the business - misunderstanding the purpose of financial projections; they exist in a pitch deck to: a) validate the founders understanding of running a business b) provide a sense of magnitude of the opportunity versus the amount of capital requested c) confirm the go-to-market strategy (nothing undermines a pitch faster than financial projections disconnected from the declared go-to-market approach) d) generally discredit you as someone who understands how to build a company; for instance we'll capture 10% of our market, 1% of China, etc. Top down financial projections get big laughs from investors after you leave the room. bonus) don't show 90% profit margins. Ever. Even if you'll actually have them. Ever. Instead: - avoid false precision by rounding all projections to nearest thousands ($000) - include # units / # subscribers / # customers above revenue line; this goes hand-in-hand with building a bottom up revenue model and implicitly reveals assumptions. Investors will determine if you are realistic, conservative, or out of your mind based largely on the customer acquisition numbers and your explanation of how they will be achieved. - highlight your assumptions & milestones on first customers, cash flow break even, and other customer acquisition and expense metrics that are relevant Avoid: - thinking about investor money as your money - approaching the pitch from your mindset (I need money); investors have to be skeptics, so understand their perspective. - bad investors; it's tempting to think that any money is good money. You can't get an investor to leave once they are in without Herculean efforts and costs (and if you're asking for money, you can't afford it). If you're not on the same page with an investor on how to run/grow the business, you'll regret every waking hour. Instead: - it's their money; tell them how you are going to utilize their money to make them more money - you're a founder, a true believer. Your mantra should be "de-risk, de-risk, de-risk". Perception of risk is the #1 reason an investor says no. Many are legitimate, but often enough it's simply a perception that could have been addressed. - beyond the pitch, make the conversation 2-way. Ask questions of the investor (you might learn awesome things or uncover problems) and talk to at least two other founders they invested in more than 6 months ago.