Few things in life are as fraught with the threat of failure as starting a business. Just ask Craig Collins, co-founder and vice president of marketing for SupplyPro, a company that produces an automated supply dispensing system. But amid all the countless business decisions, marketing strategies and hiring of core employees, the founders of SupplyPro also sought out a team of high-level advisers. These specialists hailed from a wide range of fields, including banking, accounting, marketing, insurance and law. Not only did this group provide services necessary for the start-up, but they also supplied essential advice that can only come from experienced professionals. "When getting a business off the ground, it’s easy to get caught up in the hubbub of business and getting customers," says Collins. "But there are critical, often fatal mistakes a new company can make out of the block. That's why putting together a team of advisors was one of the first things we did." Collins will never forget the first time he met his legal counsel, Michael Kagnoff of Brobeck Phleger & Harrison. Kagnoff became so excited by SupplyPro's concept that he met Collins on Father's Day to see how his law firm could help the new business jump into high gear. Similarly, SupplyPro approached Martin Bridges to provide accounting services (he's now the company’s chief financial officer) and Bridges ended up with Collins at Kinko's at 3 a.m. helping copy the company’s business plan. Do committed, experienced advisors like these truly make a difference? You'd better believe it. "A week after that meeting, I was closing a $30 million deal for them," recalls Kagnoff. "They were off and running and I was proud to be part of that." Putting together the right group of counselors can mean the difference between an emerging business turning into a high flyer or joining the legions of start-ups that crash and burn each year. By utilizing an adviser's expertise, a new company can avoid scores of pitfalls. "A counseling team is an extension of your core team," says Jim Hjerpe, vice president of marketing for INCEP Technologies, a firm that develops packaging solutions for semiconductor devices. "We really solicit advice from them quite a bit. They understand how to work with you while you’re managing the chaos." What Advisers Bring to the Table • Expertise: "Someone who is building widgets in their garage builds up their company slowly over time," says Rob Scherer, owner and president of The Accounting Group, which provides outsourced accounting services. "But newer companies have never been through the process." The advice that experienced professionals can bring fills in gaps a new entrepreneur may have. "They have a lot to learn in those early years," says Bob Lofgren, a partner with the accounting firm of Lavine, Lofgren, Morris & Engelberg. "They soak it up. You can see it their eyes." • Networking: An adviser also can be a gateway to potential customers or investors. "The right firm will have a lot of contacts," says Kagnoff. "An advisor can serve the same function as an incubator by helping a business find investors, top-level employees or other advisors." • Capital: "The acquisition of financing may be the most major hurdle a new business faces," says Beverly Stewart, vice president of Neighborhood National Bank. "Most businesses are more aspiration, perspiration and inspiration than money," points out Bill McLaurin, president of the Bank of Coronado. While networking matches the right investors with a company, if a business isn’t ready, the deal can easily fall through. Advisers can help a company make sure all the T's are crossed and the I's are dotted — just what an investor wants to see before putting cash at risk. "Venture capitalists always do due diligence," says Dirk Michels, a partner with the law firm of Hillyer & Irwin. "If there's the slightest problem, they will not give money." • Specific Knowledge: Each field has certain stumbling blocks that may be known only by those in the industry. That's why it’s critical to have advisers from each of these fields. For instance, a lawyer can help set up a corporation, structure deals and answer a plethora of legal questions. "People look at lawyers and see how much they cost, but they're really a good investment," says Carlos Heredia, a partner in the corporate finance group Morrison & Foerster. "But they can also save you money by making sure that everything is set up right so when a venture capitalist looks at the company, they know the business is structured properly." Accountants also provide an invaluable service to the entrepreneur by setting up books and perhaps even supplying a CFO or controller to start. "A lot of people think that accounting is boring," says Scherer. "But it’s really a simple concept — accounting tells you where you’re at and where you’re making money and where you’re not. A good firm sets up and tracks these. If they don’t, they could be out of business in six months because they can’t raise money if an investor doesn’t know where the business is spending its money." Bankers can provide similar financial advice, but also information on lending programs that can bring in a much-needed flow of cash. An insurance company can take care of liability issues as well as employee benefits. Even with the best business plan in the world, a company may not succeed if it doesn’t have the correct marketing strategy. "Many business people aren’t schooled in the finer points of marketing," notes Paul Sanchez, executive vice president and general manager of Stoorza, Ziegaus & Metzger. "If they can’t get the word out, it doesn’t matter how great a product they have, the company will never reach its fullest potential." A marketing firm also can help in creating branding, a logo and a name, as well as the overall message strategy. "Today's world is very busy and no one knows who you are," says Carol McAvoy, director of Broderick & Associates. "You have a very short time to get your message across, so you have to cut through the clutter." What Advisers Want From You Of course, no one works for free. Advisers get a return on their investment of time, advice and networking in many ways. When it comes to payment, several options are open to companies, especially during the time when cash is at a premium. For instance, advisers often take warrants or stock options, or stock in trade (this is especially popular with dot.com companies). Some advisers will discount fees, defer payments or allow for protracted payment schedules. Why would another business take less than their normal fee for services rendered? The reasons are compelling. • Loyalty: A company that grows into a major corporation rarely forgets who helped the business get to that point. "It’s easier to make friends earlier when the phone isn’t ringing off the hook," says Jim Pope, a partner at Ernst & Young. "When you help a young company, you’re growing your own client base. Down the road, it all comes to fruition." • Larger Accounts: The bigger the company, the larger its needs. That can translate into fatter fees for the companies providing services for them. "A lot of these small companies eventually blossom," says Jim Skeen Jr., senior vice president of Marsh Inc., a large provider of insurance services to San Diego’s booming technology firms. "So we look at working with them as an investment." • New Clients: It’s a fact that people don’t always stay with the same company. "It’s such a dynamic workplace these days," says Scherer. "It’s like Oz, people come and go so quickly around here." And when they leave, it could be to go with another start-up or begin a company themselves. And they'll remember the advisors they worked with before. "It’s a mushrooming thing," says Pope. But often the reason to get involved with a new company has nothing to do with the bottom line. "It’s fun," says Kagnoff. "You don’t usually get to be entrepreneurial in a large firm. Plus, there's an energy when businesses face issues for the first time. The experience you bring to them is much more valuable and it’s satisfying for me when my advice is taken." Choosing Right Finding the right people to be part of a strategic team is a two-level task. On one hand, advisers should be able to provide the right services for the company’s current size. But these same individuals also should be in the position to help a company grow. "It’s a partnership that should line up," said Lofgren. "It has to be fair for both." Putting together a team starts with referrals, research and interviewing. A firm should decide if a small or large service provider is best. "It depends on what your goals are," says Brian Yui, chief executive and co-founder of houseRebate.com, a new real estate-oriented Web site based in San Diego. "A local company has more time to give you hands-on assistance. But you might want a larger company if you want to go national." Entrepreneurs looking to start a business also should look for advisers that understand their industry so there's no learning curve. Experience with a start-up is key. Take a good look at the depth of their resources as well as their response time. With the emerging business environment, everything goes much quicker, what McAvoy calls "Internet speed." "Everything a big company is doing is expedited for a start-up," says Hjerpe. "So you have to be quick and nimble, leaping from lily pad to lily pad to stay afloat. An hour for a big company is a second to a start-up." Beyond the nitty-gritty details of selecting a team, there are other issues that can make a significant difference in the advisors a business chooses. For instance, the impact of the personal relationship between an adviser and the company founders can’t be underestimated. "The chemistry has to be right," warns DiVita. "If you don’t have that, nothing else will work." Sticking Together Advisers who have worked together before will create a seamless team. "You want these people to have good chemistry," says Wainright Fishburn, a founding partner with the law firm of Cooley Godward. "That's why it’s good to have a solid history between advisers. It’s like doing a mountain climb. If you know the person setting the pitons, you'll climb further." And while one adviser might be the best for expertise, another might have a higher profile in the business community. Sometimes it’s wisest to choose the latter. "We try to associate ourselves with high-powered people," admits Yui. "These are the people who can generate additional investors. They not only add credibility to our company, but they can raise money through their connections." A company that has a well-known name on its advisory council can often calm an investor's worries and that can lead to increased capital. But to attract high-powered names, a company has to make itself quite attractive. That first sell — to an adviser — has more impact than any sale to a customer. "You’re basically selling the long term future vision and your future value to them," says Collins, of SupplyPro. "Investors always look at two things," says Fishburn, "the idea and the pedigree of the people involved." By combining the two, the odds of an emerging business' success can be greatly increased. So putting together a high-powered, well-connected and knowledgeable board of advisors may be the most crucial decision a company makes in its formative years. "You have to have three things to succeed — a great idea, a great business model and a great team," says Collins. "You can’t do anything by yourself — you have to work as a team. We owe so much of our success to others. There's a whole host of people who came together and pushed our vision forward."

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