1. Be Prepared for a Prospective Advisor's Due Diligence By: Susan Hammond

    Be Prepared for a Prospective Advisor's Due Diligence By: Susan Hammond


    A prospective advisor expresses an interest in considering joining your advisory board.  In order to decide she needs more information. As a privately-held company the information can only come from an internal source. Consider the following five steps before distributing any information:


    How to Proceed

    • Get a signed confidentiality agreement from the prospective advisor.
    • Remind the prospective advisor you are sharing information not available in the public domain.
    • Get a list of what specific information the prospective advisor is seeking.
    • Provide the requested information as soon as possible.
    • Offer an explanation of either when you will have the information or why it's not available, if you don't have a particular piece of information.


    The types of Information you could be asked to provide can include:

    • Audited or reviewed financial statements for the last three years.
    • Historical internal financial statements for the last three years.
    • Tax returns for the last three years.
    • Current year financial reports (balance sheet, income statement, cashflow, accounts receivable and payable aging reports)
    • Current Strategic Plan including financial projections.
    • Operating Budget for last three years.
    • Capital Budget for last three years.
    • Organization Chart.
    • Current Marketing or Promotional Plan.
    • Recent Competitor Analysis.
    • Recent Marketplace profile/review.
    • Top Ten Customers.
    • List of people to speak with as part of his/her due diligence.


    Sometimes people are put-off if a company doesn’t have all the information they expect to review.  If you’re upfront and explain why, it won't become a deal breaker. It could be one of the reasons you are forming the advisory board! 


    What other information would you provide to someone you're considering for your advisory board?

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