Hot answers tagged advisors
10
(Disclaimer: helping companies create a board of advisors is part of what I do for a living.)
First of all, congratulations on recognizing the value of establishing a board of advisors -- many entrepreneurs give little thought to this incredibly valuable resource.
Next, allow me to respectfully demur as to some of the other comments by saying that an ideal ...
10
Peldi from Balsamiq Mockups built a nice board of advisors. He explained how he did it (even with the actual email template) and how it's working out for him in this interview with him.
To directly answer, usually they'll be in your network, because "advising" is a significant time investment and strangers are unlikely to want to do that.
Aiming high is ...
9
Everyone needs input on their startup from time to time. It's really hard especially if you are working by yourself or carrying the majority of the responsibility.
There are a number of things you can do to get good advice:
Find a mentor (or several of them) that are happy for you to take them out for lunch from time to time and who can listen to you and ...
7
The typical advisory board (or Technical Advisory Board, TAB) member does not get monetarily compensated but does get stock options in the company and a per diem for expenses. The board appointment is usually 2 years and the stocks vests over that time. This compensation is approved by the board of directors and there is usually a boiler plate letter that ...
6
This arrangement is backwards. This is not the way legitimate capital raising works, at least in my circles. This sounds like someone trying to take advantage of you. I would stay away from this guy.
If this guy really believed in your company, let him invest in it.
If he does have "insider VC connections" that he can somehow "introduce you to," the very ...
5
I guess there's not a "true" answer to this question, it mainly dependes what's the stage of your startup (pre-seed, seed-funded, VC-funded).
In general, advisors get something between 0.1% - 1% of the company, vested monthly over 2 years.
The important thing here is that advisors must bring something to the table. Make that clear before engaging them, ...
5
Sam will recognize that he can't insist on anything at all. But it would be plain unethical to fail to recognise his pivotal role in getting you to this point, and the suggestion looks totally reasonable given the story.
In fact, in slightly different circumstances, Sam could be hiring Eric and you to execute on an idea of his - in which case you might be ...
4
What I think I'm seeing emerge here are two schools of thought. There's the "Jason/Balsamiq school," which favors a very informal advisory board comprised primarily of people you already know and admire. Then there's the "Scott/Warrick school," which favors a more formal organization, assembled from industry veterans with specific connections or skills ...
4
Protect the idea: doesn't matter much, your problem is building a great site, focus on that instead.
It looks like your #1 challenge is building the site. You'd be surprised how little money it takes not only to build (code) but also populate content.
You need to convince people to help you and join you as co-founders. That takes convincing, meeting ...
4
Assuming that you are looking for advice from your advisory board (that's not always the case - see below), I don't think you have to offer options to your advisors, but it does help.
I sit on the advisory board of three startup companies. One of them has granted me options - the other two have not offered any compensation. I help these companies for the ...
4
It sounds like Sam did a lot of work to get the idea off the ground, which warrants cofounder status in my book.
If it's just three of you who founded the company, then 15% seems reasonable to me. There are plenty of examples of cofounders who get things going and then leave, so it's not uncommon.
It seems like a fair deal.
4
Everything is negotiable but if you don't have a good relationship. he won't be much use as an advisor.
Whether you know this guy already for not, take him out for lunch, start building a relationship and try to get him interested in your idea. If he's interested and has the right experience, he'll be a great advisor. You can later sit down and have a ...
4
Depends on the motivation of the Advisor. Some join because they may be able to use what you're making down the road (these are the best kind, in my opinion), so early access and the ability to steer product development can be incentive for them to participate in a board of advisors.
However, your question touches on the broader topic of how potential ...
4
I'll recommend you separate the role of legal counsel from investor so you get objective legal advice to prevent conflict of interest. I've heard of inexperienced entrepreneurs who ended in a jam because they signed non-diluting terms with their legal counsel (who was also an investor).
No harm with trust, but better to have independent advocates and ...
3
Find a professional/business mentor.
Start with a small group of potential mentors. Ask 3-4 different seasoned business professionals that you know if you can take them out to lunch once a month to talk shop (this means a weekly lunch meeting for you). The goal is to land one solid long term mentor relationship out of this group. If you don't find a mentor ...
3
It's tough if you don't have a special angle to communicate, because by definition it sounds like they'll get a ton of email about startups.
A way to break in is use Twitter and @name them for a few weeks about stuff they honestly would be interested in. That way at least they've heard of you at all -- even very famous people still read those @tweets.
...
3
Best practices for a Board of Advisors depends on the stage your company is at. In general, you will want to bring your Advisors together at least twice a year and call them frequently for specific questions. Some of the specific things to consider include:
Startup Stage
Probably the most intensive for an advisory board since plans are in flux. Your ...
3
Congratulations on the exciting development for your start-up. Feeling confident to launch the capital acquisition campaign is a great place to be. You now have received your first unsolicited offer by someone who would like the money you have.
Based on my experience the amount of $1500/month plus board meetings deffered pending raising the money is fair. ...
3
Opinions vary. Here are a few:
http://gust.com/angel-investing/startup-blogs/2012/04/10/5-traits-investors-look-for-in-entrepreneurs/
http://www.bothsidesofthetable.com/2010/10/06/the-four-main-things-that-investors-look-for-in-a-startup/
http://blog.startupprofessionals.com/2011/06/investors-look-for-these-six.html
...
2
Jarie gave a great answer - one other fact. These options are Non-Quals v. ISO's; if you don't know the difference, in a nutshell, ISO's are for employees only. Non-Qual's have the following benefits:
Can be given to anyone (partners, consultants, board members, etc.)
Can be priced below (or above) current market value
Typically taxed on exercise at ...
2
In the words of Michael Corleone
"Senator? You can have my answer now, if you like. My final offer is this: nothing. Not even the fee for the gaming license, which I would appreciate if you would put up personally. "
Give them nothing. They want equity just to make an introduction? That is ridiculous.
What do you mean by "heavyweights"?
If they ...
2
You can pay for a business coach or mentor, who will charge you by the hour. Alternatively, you can go to various business advising sites (shameless plug here - my site does exactly this - you can find a link on my profile page) which give general advice, but it won't be tailored to your particular situation.
Depending where you are located, there may be ...
2
So if Sam took 0% that would leave you with 7.5% more equity than what he is proposing. Would you risk his good will and the contacts he has and one of the driving forces for that?
You are making too big a deal out of it - you have 40%. Before he came along you had nothing...
If he had just mentioned the idea to you over drinks, and you took the ball ...
2
@Eddy. There isn't any reason they shouldn't be an advisor but you do need to sort out some ground rules in order to keep the relationship good.
Their advice isn't law. End of the day its you making the call and your head on the line. Discussing something with someone else is critical but if you have to go against their contribution for what ever reason ...
2
Start by offering him a smile and a firm handshake :) Maybe start small and then offer him more of a role in the Start up later on.
If you don't know him, find someone who does that can make an introduction, or make an introduction yourself saying you have a mutual friend. Invite him to lunch, to a drink, or offer to stop by his office. Say something ...
2
Well if this person is as good as you say, then it may be worthwhile as a make or break for your company. I would offer them a 2 stage deal, something like:
Buy In Over Time. 10% "buy in" say 1% per 2 months they are actively advising for up to 1.5 years.
Additional Equity Milestone. If they hit specific targets you establish then they get an additional 3% ...
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