The Knowledge Shop

Advisors, Advisors and doorbells

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So many people talking advisory boards at the moment, so thought i'd share some of the learnings from this week. Including notes from a great session that Ed Kang gave for Startups.com

You can watch it here.

Key takeaways....

Advisor Compensation Levels:

  • Consider how much responsibility will they have?
  • 0.25 - 2% typical advisor level (2% is really high. Has to be making a BIG contribution / moving the needle).
  • Advisor’s relevance can change over time. So just because they are valuable now, doesn’t mean they will be throughout. (Hence need to not overweight in early days).
  • Ensure there is a vesting schedule (with a cliff).

    • Purpose: The board should round you out, especially if you can’t find a cofounder / employee with those skills.

    Avoid:

    • Crossover between above characteristics. It gets cumbersome.
    • Get people to join, who will give you genuine advice / add value (not to make your pitch deck look good / help you raise).

      • Recruiting Tactics:

      1. Network, treat it like another other recruiting process
      2. Build advisor pool slowly.
      3. Find relevant people to ask their advice from first - approach like business research
      4. Assess the chemistry.
      5. Qualify their advice, how valuable is it?

        6. Formalising things:

        • Ask them if they’d be open to formalising the agreement
        • You can use the “Founder Advisor Standard Template” if its a straight forward arrangement (just make sure to get a lawyer to check it first). 


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          The Knowledge ShopBy Tori Hanson
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