Using Stock On Board Invitations
We all do it. We want to be around successful people. Yes, very popular people. An African proverb says it all “success has relations, vanquish is an orphan”. That explains why some Nigerian entrepreneurs approach popular people and give away equities. Yes, you want to have a popular person in your board and you entice him by giving away your company, for nothing.
Sure, when done strategically, there is value. If you are making make-up and you can get Linda Ikeji to join your board for 5%, you have scored a big goal. Her webinality can move the brand provided she would do it [publicize the brand]. Unfortunately, popular people seldom – the equity gone; glory lost.
This is what I suggest: before you part with the equity, find out exactly what you would get, in writing. Do not assume that because you have given away equity, the person will automatically help.
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I know you want to throw names that a former governor is in your board. I have a message for you: the people that have money [the investors] do not care. They are governors over the money they manage. Unless that governor is adding value, the name is irrelevant. It was painful listening to a young man who gave out huge part of his firm, expecting help with contracts in Abuja. Those men were good to accept but busy to help.
"Those men were good to accept but busy to help."; scamming going on everywhere!
Just like in sports (especially football), names don't win matches, you have to go out on the pitch and demonstrate that the names are actually valuable.
Sometimes there's that temptation to be seen around celebrities and famous people, and in trying to achieve such, you give away your mind, soul and the very essence of your relevance; only to be hit with the reality that the popular person is the ultimate liability to ever encroach your territory.
A serious assessment is really required, with regard to the viability and usefulness of having a popular name near your brand. In most cases, the names contribute nothing, other than depreciation; even those who loathe those names are likely to boycott your products and services.