If you’re launching a health tech startup, you can’t just go into the project without any technical or advisory backing. You need industry experts and professionals to guide your organization and help you develop your product and services in an industry-compliant manner. In addition, health is particularly a sector where you’ll be dealing with people’s lives and well-being. Therefore, you need to make sure you’re doing all the right things. You’ve probably seen those exciting products on your Charter Spectrum cable which promise unbelievable health benefits. However, many of them are not supported by any medical professionals, so people end up being suspicious of them.
Therefore, you should have a well-chosen tech startup advisory board. This board should include a mix of technocrats, health professionals, and startup experts. This will help you get your company started on the right foot. In addition, you can actually offer a product that is supported professionally and is economically viable. So, you should definitely establish a health tech startup advisory board. Here are a few tips you should follow when you do so.
Recruit the Right People
This is the most important part of the process. You need to find the right people for your advisory board, with a balanced mix of credentials. You must include a medical professional who has some sort of expertise related to what your company is offering. In addition, you should recruit someone who has experience with helping startups succeed, and can guide your development procedures.
Furthermore, you also need tech mavens who can drive the innovation part of your startup. All of these people’s skills will come in handy for your product development, marketing, and business procedures. You need to listen to their advice and utilize their expertise, so that your company is successful. Around three to five members work well for a new startup, with the right split of health and tech professionals.
Decide How Much Equity to Reward
When you get advisory board members on your startup, you’ll have to give them some equity. This equity depends on what they’re contributing to the company, and the amount of leverage you’ll give to them. Make sure you offer appealing equity, so that you can get top-notch members on your board.
However, do not give away so much equity that you’re at risk of losing the controlling shares. Only give out as many shares as it would take to get expert advisors, without losing control. This can be a particularly risky business, as you don’t know exactly how beneficial a board member will be for you.
Include Vesting Schedules & Cliffs
You need to have the right mechanisms in place to make sure your advisory board members contribute to the startup, without you losing your shares. Vesting schedules and cliffs are one of the best ways to implement such mechanisms.
This basically means that you have an agreement with the members, which states that if the relationship doesn’t work out within a certain time period, you will still retain the equity. This allows you to replace advisors if the situation is not working out, without risking any loss of shares or control.
Determine What Their Level of Input Will Be
Of course, you want to determine exactly how much your advisors can contribute to your business processes. Make it clear what their job description will be, and how much power they have over your business. Think about how much you want to involve them in the regular operations, and how much leeway they have to alter these procedures without going through you.
It is best to have a clear approval hierarchy in place, and discuss any input before actually implementing it. In addition, you should make sure that you and your board have detailed plans with all the intricacies like expected revenue and costs in place.
Create Clear Confidentiality Clauses
One of the biggest risks with health tech startups is that someone will copy your innovations and create their own company. To prevent this, have your advisory board sign strong confidentiality and non-disclosure agreements. These should clearly lay out what information can be shared with whom, and what should be kept strictly private.
Have a specialized lawyer draft these agreements, and discuss them with all parties involved. This way, all of your bases are covered, and you don’t stand the risk of leaked proprietary knowledge.
To sum up, setting up a health tech startup board is one of the best things you can do for your company. However, you need to do this carefully so that you don’t lose equity or credibility.