The best way to use advisors

by Dylan on September 2, 2013

Every startup seems to have advisors. In fact, several I’ve spoken to feel they must have advisors. Despite generally being granted equity for free (advisors are usually ‘paid’ 0.25-0.5%), they’re probably one of the most under-utilised assets a company has. Don’t fall into that trap.

1. Be organised for them

Every month I try send our advisors a list of (individual) tasks to help with. Questions, recommendations or introductions (usually the latter).

2. Brand name advisors are a waste of time

You should only select advisors for gaps you have in your knowledge or network (or possibly hacking Angel List). Adding people as non-investors because of their name is a total waste of time. Trust me, nobody cares.

3. Advisors won’t help you raise money

I’ve seen companies dedicate entire slides to listing advisors (been guilty of it myself in the past). Stop! You’re just wasting valuable pitching real estate.

4. Keep them updated

Always keep your advisors on the same updates as your investors. The more they know, the more useful they can be.

5. Be ruthless

If you find that you’re not using specific advisors, cut them. Otherwise you’re just handing out equity for free.

 

“All my friendships stay on shuffle” -Schoolboy Q, ‘Sacrilegious’

  • DC

    Thanks Dylan

    Do you/have you seen the need to tie them to a particular minimum time committment for their advice? As part of the shareholder agreement I guess….?

    Have you ever considered/tried a cash incentive for the setting up of meetings with potential customers, and other key activities, in lieu of the equity?

    • dylancollins

      Well, generally it’s something like X amount of emails/calls per month rather than a fixed number of hours (although nothing wrong with that either).

      Anything cash-based turns into a BD consultant/retainer situation. Again, it can work as well but fundamentally you’re talking about a different thing. You get more volume but unless they have equity, I’ll always be a little suspect about the long-term quality.

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