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Startups face several challenges when building their business. Advisors can make a huge impact in helping them win new customers and build better products. Advising is a great opportunity for expert operators to gain equity without investing or working full-time at an early-stage company. In a recent webinar, we had the privilege of gaining insights from three distinguished panelists- Edward Chiu, (CEO and Founder of Catalyst) and advisors Debra Squyers, (CCO Bonusly) and Diane Gordon, (CCO Yotta).
Let's delve into the invaluable insights shared for those aspiring to make a meaningful impact in the advisory space.
Crafting Your Advisory Journey
Targeted Expertise
Debra advises aspiring advisors to focus their expertise. Hone in on specific areas rather than casting a wide net to maximize impact.
The Art of Pitching
Edward emphasizes the need for a clear mission, a compelling value proposition, and mastering the art of pitching for effective advisory engagement.
Building Your Brand
Diane stresses the importance of building a strong personal brand by sharing unique ideas and adopting a proactive approach.
What Founders Seek in Advisors
Proactive Engagement
Founders value proactive advisors who initiate valuable connections and demonstrate a proactive commitment to the company's growth.
Well-Connected and Specialized
Advisors must be well-connected and possess specific, relevant skill sets to be valuable to founders.
Making a Positive Impact: The Advisor's Role
Extension of Team
Debra sees advisors as an extension of the team, emphasizing mission alignment and leveraging unique networks for positive impacts.
Passionate Commitment
Edward highlights the need for passionate commitment and domain expertise, avoiding a generalist approach in advisory roles.
Transparency and Trust
Transparency, responsiveness, and a well-defined focus are foundational for building trust in advisory relationships.
Equity and Negotiation in Advisor Agreements
Pre-Set Equity
Equity amounts are often pre-set, with limited negotiation room, typically ranging from 0.2 to 1%.
Earning Your Stripes
Demonstrating value and aligning with the company's values can influence equity negotiations.
Negotiation Opportunities
While early-stage advisors may have limited room for negotiation, those in high demand might find opportunities to negotiate based on their exceptional skills and unique contributions.
The Right Number of Companies to Advise
Quality Over Quantity
Advisors should prioritize quality over quantity, considering personal capacity and the depth of contribution to each company.
Belief in the Company
Advising only companies one believes in ensures genuine commitment and a more impactful advisory relationship.
Time Commitment in Advisor Agreements
Frequency and Compatibility
Initial interactions may require a minimum of four meetings a month, but great relationships go beyond set meeting times, focusing on compatibility.
Clarity on Expectations
Aligning with the team and product, clarifying expectations, and establishing agreements around NDA and equity components are crucial.
Negotiation Opportunities
Edward provides insights into negotiation opportunities within advisor agreements. Advisors can negotiate milestones, top-ups, and refreshers based on their contributions, creating a win-win scenario for both advisors and companies.
Conclusion
Embarking on an advisory journey requires strategic planning, a commitment to transparency, and a passion for the companies you advise. By adopting a targeted expertise approach, being proactive, and focusing on quality, aspiring advisors can unlock success and become valuable contributors to the growth of the companies they guide.
Be sure to register to listen back to the rest of this webinar on-demand for more great tips on being a solopreneur.
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