Advisors can be so much more than social proof and tactical advice
“Can we put you as an advisor in our deck? You don’t even need to do anything and we’ll give you equity. It would be a big help for our fundraise.” This was the proposition offered to me surprisingly frequently during my pre-Homebrew days. You see, the demand for “startup advisors” were going through a little bit of a boomlet.
AngelList had just started and their company profile page had a bunch of “Advisor” slots to populate that were displayed in the same visual design as investors and team members. This subtly started to create social proof pressure to fill out those available spaces in the most impressive way possible. Never underestimate the power of defaults!
Anyhow, fast-forward to 2021 and it almost feels like startup advisor roles have fallen a bit out of fashion as everyone scrambles to be an angel investor, a scout or solo capitalist. Many of the people who previously might not have had access to capital are now able to invest their own dollars, or someone else’s, and this has much greater social proof for both the company and the individual. Most of the companies we back figure out how to use advisors in compelling ways, it’s just not as public as it used to be.
That said, there are three types of advisors that I don’t see as commonly utilized by early stage startups — at least the ones we’re not advising 😉
The “I’m Going To Recruit You Down the Road” Advisor
Great founders are always recruiting. Often for open roles but also playing the long game, building relationships with passive senior candidates who either aren’t ready to leave their current job, or are more interested in the opportunity once you’re a bit further along. Rather than just making a note to ‘grab coffee’ every once in a while, I suggest looking to bring them on as advisors. It doesn’t have to be a huge commitment on their part (or significant equity), but just start giving them some tie to your startup and some incentive to maintain the relationship. Obviously this won’t work if they’re current employed at a competitor but otherwise it’s a half-step in the right direction. Mutual try-before-you-buy and gives them a chance to better understand the company.
The “Set Up My Functional Leads for Success” Advisor
I’m a big proponent of startups hiring talented high-ceiling people who are earlier in their careers and haven’t necessarily yet done the job they’re being recruited for. For example, if you meet someone who has been a PMM at Google for a few years on a high performing team and is itching to get into a role that allows her to spread her wings more, grab her. Don’t worry that she hasn’t had a senior title or whatever. Just get her on board and set her up for success. And one way to help her is to make sure she has a mentor. Not just inside of the company but outside.
Ask her if there’s someone senior in her career that’s been a great manager, and if so, bring them on as an equity-compensated advisor to your company. Don’t make it her job to convince them to support her ongoing, give them some skin in the game. You’ll be setting the new hire up for success and this should pay off in multiples. I’ve also found that during recruiting process telling a candidate like this that they’ll get an ‘advisor equity budget’ to bring people closer to the company who can be useful is a signal of trust and agency that helps close them.
The “Customer Council” Advisor
This works especially well when you’re selling into a non-tech industry because getting a bit of equity in a startup is even more novel and exciting. A sales and marketing tactic as much (or even more) than a customer development one, try setting up a Customer Council Advisory Board. For relatively small amounts of equity you can create a group of 3–12 folks from your industry who feel a mutual obligation to help make you successful. It’s a great group to use for networking, press quotes, product feedback and such. Of course avoid direct conflict of interests — i.e. these people can’t be your current buyers (most of the time) but they can certainly be from customer organizations (their own policies permitting) and from larger customers that you’ll be targeting a few years down the road.
So hopefully you can make use of advisors in new and interesting ways! Remember, the standard agreements are two years in length, have a 3–6 month vesting cliff (with monthly thereafter) and preserve right of either party to terminate. Have you had success using advisors in a nontraditional manner? Let me know!
Notes and More
Give everyone the vaccine! Try and prioritize the vulnerable first of course, but let’s focus on speed of rollout too. Everyone who gets vaccinated makes it safer for everyone else.