“No such thing as bad student, only bad teacher. Teacher say, student do” – Mr. Miyagi
Having an advisor involved with your startup can be an invaluable experience and potentially help you to navigate your way to success! At Potential.vc we have found that the advisor role we play with some of our startup investments is key to their success.
The Advisory Role
As a startup it is important to understand the advisors motivations. Usually, advisors will agree to the role in return for some equity in your company; this provides them with more of an incentive to help you succeed.
Generally, obtaining a big payout is low on the advisors agenda, because investing in startups carries a high risk. Although if they are going to invest in you, this may be for tax breaks (SEIS, EIS schemes in the UK), they could do so and provide a hands-off role. However many advisors, whether they have an equity stake in your startup or not, should have a genuine interest and background in your market. An advisor is there to help you succeeded, they can do this by sharing their past experience, industry knowledge and make introduction to other people/partnership opportunities that you never thought about!
At Potential.vc we have advised and mentored countless startups over the years on to success :) , whether your an investor or startup, find out more through our investment syndicate click here.
Using Advisors
You should be looking to find advisors who:
- have excellent knowledge of your industry
- have expertise in areas your startup is lacking
- have experienced creating successful companies in the past
You should be looking to agree with your advisor from the beginning on the particular areas they’re most likely to be able to help you with. As you will spend a limited amount of time with your advisors, you should send them regular email updates about your progress.
These emails should be:
- Weekly/bi-weekly
- Highlight specific points you want your advisor to help with
- Sent to other interested parties, such as VCs that you know
- Keep them short, people don’t like rambling
- Focus on getting advice related to their area of expertise
Lastly — They will tell you the truth!
The final point about advisors is that often they will provide you with advice you do not want to hear, because you are very connected to your startup and thus do not see the bigger picture. Whilst advisors might not always be right, often their more neutral perspective and experience mean that their advice is usually sound, and thus you should be looking to take it on board; at least giving it lengthy consideration.
Doug
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