Advisors can be very helpful to startup founders.
Here are steps to consider in selecting an advisor:
1. Check your company needs for the coming two years and determine what is missing.
2. Look for advisors who add value to the team by bringing the necessary skills and experience the team doesn’t already have.
3. Look for those with skills, experience, and contacts needed for the company goals.
4. Focus on people with time available to spend with the company as many advisors come up short on their time allocation with startups.
5. Document the engagement so the work to be done is clear to all.
6. Include the frequency of the meetings and what is expected of the advisor at those meetings.
7. Define what you expect them to bring to the meetings such as research, contacts, or their experience.
8. Make sure you compensate the advisor appropriately.
If you want real work done you’ll need to pay something for it.
Compensation is typically equity in the range of half of one percent to one percent per year.
Vest the equity over time so there’s a clear endpoint.
If the engagement went well, you can sign them up for another round if the company needs it.
Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.
Let’s go startup something today.
Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.