SCIENTIFIC ADVISORY BOARD

Scientific Advisory Board (SAB) members are usually academic scientists who have stellar reputations in their fields, have extensive experience in scientific or clinical areas pertinent to the startup, and may even be well connected in the business community.

Too often, companies recruit scientific and clinical advisors who are either too busy or entirely unqualified to help the company. It may be counterproductive to recruiting an advisor who won the Nobel Prize for work done decades ago but has not accomplished much since.

You may want to ask a scientist to join your SAB if he has key patents that your company will license, being careful that the overlap in interests does not constitute a conflict of interest. An SAB member may help recruit people to the startup from his own laboratory or network. Venture capitalists often rely on their own scientific advisors to screen potential investments; it doesn't hurt if one of them is also on your SAB.

If all you have is a story built on scientific rationale, using that story to recruit an advisor, ideally one who has helped found companies in the past, may be the best first step.

That advisor may then open the door to a good attorney, investors, and possibly management candidates.

Scientists may want to join your SAB because:

• They have the expertise to make a significant contribution.
• They feel their contribution would be appreciated.
• They like the management team.
• They are interested in the startup and want to stay informed of its progress.
• They see licensing opportunities for their own research and technologies.
• They want equity in the company.

If you want a particularly well known scientist on your SAB, odds are that this person is in high demand and may be asked to join a different SAB every week. Some scientists sit on only one or two boards while others sit on a dozen or more. It is hard to imagine that a scientist sitting on more than 6-10 boards could possibly make a significant contribution to each; in a few cases, their name in the business plan and website is that is asked of them. Scientists who want to play active roles on SABs are likely to sit on fewer than six. Like VCs, they may refuse to consider a startup that does not come with a reference from a trusted source. If you want to gain an audience with a high-profile scientist, consider asking one of his or her more accessible colleagues or former students for an introduction.

When approaching a scientist for the first time about joining your SAB, discuss contributions they can make. Even if you only want them for their stellar reputation, focus on how they can be useful. The details of equity should be brought up in the first meeting but should not be the center of discussion. The Equity chapter discusses compensation in more detail.

Scientists will want to know what is expected of them before they decide to join an SAB. Companies may convene their entire SAB several times a month or not even once a year. Some prefer to engage each advisor individually or in small groups for focused discussions about issues relevant to each advisor's area of expertise. A company may go through a period when management interacts with a particular advisor every day.

You may want to sponsor a prospective advisor's laboratory to do research for your company. Because the certain experimental results can impact share price and profit motive may compromise the investigator's objectivity, some universities have strict policies forbidding investigators from doing sponsored research for companies in which they own equity. Be aware of such policies when deciding whom you want on your SAB.

An SAB can have over a dozen individuals, but early-stage companies may start with 3-5 members. The size of the SAB should accommodate productive discussion at meetings even if a few people cannot attend. Having people on the SAB who have worked together in the past, either in the same laboratory or on another SAB, can facilitate discussion.

Having the SAB members join for short terms, such as one to two years at a time, allows you not to renew a contract when an advisor is no longer needed. It is difficult to ask an advisor to step down if the company has set a precedent of allowing inactive advisors to remain on the board for prolonged periods.