Lots of startups have advisory committees.
You appoint them in much the same way as an internal committee and there is no official requirement to have one at all, neither are there any rules or guidelines about how many members with which skillsets and/or backgrounds you should have.
The types of advisors that business founders will often target include those with:
- substantial reputation and credibility in the industry sector in which that startup now operates, who bring industry know-how, experience, contacts and validation to the new business and its founders, helping to give investors confidence and open doors to sales opportunities, and/or
- skills that the founders do not have, e.g. financial modelling, business leadership, legal and regulatory knowledge, coaching and mentoring...
What do you need to appoint an advisory committee?
Proposing the committee to the directors.
Setting out the type, scope and composition of the committee, as well as who you intend for its members to be.
3. A draft committee constitution (if you want to do so)
Setting out the objectives and targets for the committee, as well as its proposed membership.
How do you appoint an advisory committee?
This is, again, very much an internal matter for your company.
Provided that there is sufficient agreement between the directors (and unless your articles of association say otherwise, a simple majority view would suffice here), you can simply follow the order of the items listed above and put your advisory committee into action.
This is not the same as the appointment of a director or non-executive director to a board position. The advisor does not become a board member.
To appoint or remove an advisor is pretty flexible in that you can do so when the board chooses to do so, albeit that if you're agreed on contract terms, you'll need to ensure that any termination of appointment complies with those terms.
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