A startup advisor can be invaluable to help you navigate through startup pitfalls, structure your company, find funding or scale up your business for profitable growth.
I recommend a startup advisor — provided you can devote the time to make the most out of your advisor’s expertise, talents, and connections.
If you just go through the motions without leveraging what your startup advisor has to offer, then it will be a waste of time. But if you are committed to accepting advice and mentoring, and you pick the right startup advisor, you can accelerate your business’s success.
So exactly what does a startup advisor do? And when exactly do I need a startup advisor? In this piece, I’ll answer those questions and many more.
The Ins and Outs of a Startup Advisor
What is a Startup Advisor?
A startup advisor is a person who provides industry or subject matter advice, mentoring, and/or networking connections to a startup entrepreneur or startup business.
A good startup advisor also acts as a sounding board. He or she is someone the founder of a business can bounce ideas off of — and talk through problems with.
You probably won’t find everything you are looking for in one person. For that reason, some entrepreneurs assemble advisory boards consisting of multiple advisors. This way they get a range of advice, skills, and support.
What Does a Startup Advisor Do?
There’s no one-size-fits-all for the role of a startup advisor. What a startup advisor does for you and your business will depend on what you need. For example:
- A high growth tech business may need help raising equity funding or strategic alliances with big tech players.
- A local business, on the other hand, may need a startup advisor with industry knowledge, accounting skills or deep marketing expertise.
If you were writing a job description for a startup advisor, that description could be very different from business to business.
Needs change over time, also. In the first six months of your business you may need advice about forming your company, setting prices, recruiting staff, finding office space, or getting your first customers. A year later, you may need help opening doors to industry distributors or expanding internationally. So the skill set of the startup advisor you seek may depend on the stage your business is in.
Advisors typically add value in five ways:
- A startup advisor offers knowledge or skills you don’t already have. A valuable startup advisor is someone who augments your own abilities. In other words, he or she knows what you don’t know, or has skills you don’t have. A good advisor compensates for your weaknesses.
- A startup advisor may have connections you don’t have. A startup advisor can be invaluable to open doors to potential partners, investors, service providers, and key executive hires. A startup advisor with a long list of contacts may be able to get you an introduction and your phone call returned. After that, it’s up to you.
- A startup advisor devotes enough time to meet your needs. You can’t expect an advisor to be a full-time or part-time employee. However, you don’t want an advisor who is impossible to reach, or impatient and distracted. It really isn’t about a set number of hours. It’s more about whether the startup advisor gives undivided attention when you need it. It could be just a half hour, but that half hour may help you avoid a costly mistake.
- A startup advisor is someone you can develop a good rapport with. A startup advisor may be invaluable as a mentor or sounding board, to talk through problems, strategies, and what ifs. That’s why it’s important to have a good “fit” with your startup advisor. If the two of you have different value systems — say one of you is committed to bootstrapping but the other thinks investors are the way to go — or if you grate on each other’s nerves due to different communication styles, you’ll stop talking. Then what’s the point?
- A startup advisor is someone you trust enough to be honest with. Both sides need to trust each other enough to speak openly, even disagree. Ultimately, the founder will have to follow his or her own judgment. A good startup advisor will not take offense if the founder doesn’t follow advice. After all, the advisor is there to advise, not make the final decision.
When Do I Need a Startup Advisor?
The answer to this question is going to be different for every business. Some entrepreneurs find it helpful to seek out a startup advisor from the get go. Others wait until they run into new challenges or growth opportunities. Or they seek out a startup advisor when they start hesitating to make certain decisions.
Generally, you’ll want to seek out a startup advisor when you have a specific reason for doing so.
This could be that you’re just forming your first business venture and aren’t sure about some of the legal and compliance issues facing your business. It could be that your business is facing product development issues. It could be that you are considering a new product or service, and want to bend the ear of someone more experienced.
You must be able to devote time to communicating with your startup advisor. If you are so busy you don’t have the time to talk with an advisor, wait a few months until your workload settles. Just don’t wait too long, until the business is in a crisis. Startup advisors are for big picture guidance or addressing a specific issue, not crisis management.
What Should I Look for in a Startup Advisor?
As a founder, you will want to look for a startup advisor who delivers the specific abilities, skills, and advantages you need — at that point in time. As you search for startup advisors ask these types of questions:
- What could I use advice on most, right now? Marketing? Legal? Accounting? Sales? People management? Compensation? Manufacturing? Something else? Then look for startup advisors who offer that kind of expertise.
- Would a key introduction help me accelerate the business? If so, who do I need introductions to? Does the advisor I’m considering have those connections? More importantly, is the advisor willing to make introductions (not everyone is)?
- Could I benefit from kicking ideas around with someone experienced? How much of a sounding board or mentor do I need? Some startup advisors bring decades of business experience and a broad perspective. That could be more valuable to a new entrepreneur than subject matter expertise.
- What kind of format works best for me? Structured board meetings? Informal lunch meetings? Quick phone calls? Skype video calls? Online chats? Emails? Is the advisor willing and able to work in my preferred format?
- How much time ideally would I like from my advisor? If you simply have questions on a narrow topic, then a one-time call may suffice. But if you’re looking for ongoing guidance, then you’ll likely want monthly or quarterly meetings or calls, with email communication in between.
- Could I communicate well with this particular advisor? As you talk with a potential startup advisor, see if that rapport is there. In other words, how easy is the person to talk with? How available? If you can’t be open or if you feel the person is impatient or cutting you off, you won’t get value.
How Do I Find a Startup Advisor?
In my experience there tend to be two different approaches to finding startup advisors, depending on whether your business is:
- A high growth startup
- Any other kind of business
High growth startups, such as Silicon Valley tech startups, are often focused on getting venture capital or angel investment. Or they participate in an accelerator that provides a package of startup services including advisory support.
Startup advisors for high growth startups tend to be investors in the company. They may receive an equity stake in exchange for participating as a startup advisor.
Of the 500,000 to 700,000 new businesses that start in the United States each year, only a tiny percentage are “high growth” or part of an accelerator program.
The vast majority of startups are not high growth, but instead are bootstrapped. They may get help from friends and family, or use credit cards or personal savings or some other means of getting off the ground.
If yours is a non-high growth business, you may not have the funds to pay advisors or have access to Silicon Valley insiders. If that’s the case, you’ll have to rely on volunteer advisors — or get creative.
Here are some practical ways to find a startup advisor, on the shoestring budget of a typical non-high growth startup:
- SCORE: SCORE offers plenty of startup advice on its website. But more importantly, it will pair you up with a mentor. You can search online to find a mentor with the expertise and skills you are looking for. Then you meet with the mentor. SCORE mentors are volunteers and their services are free. However, you must follow SCORE’s program methodology.
- SBDC Centers: America’s Small Business Development Centers are a network of places where small business owners and startup founders can get advice and assistance. Often located in local universities, the SBDC centers provide free or very low cost assistance. The best place to start is to find the closest SBDC center to you. Keep in mind, you have to fit into the programs and structures of the SBDC process.
- Online Groups: Perhaps you’d like a less structured arrangement where you can participate a few minutes a week or as you have time. In that case, check out forums and online groups. Facebook groups like “Business Startup Experts” offer helpful insights and informal access to experts in a variety of industries.
- Local Advisory Programs: A variety of local programs exist which will assemble an advisory board to assist your business. For instance, the nonprofit Athena International offers PowerLink, a program that matches women business owners with a volunteer advisory board for one year.
- Consultants and Service Providers: If you have very specific needs, and some budget to pay service providers, consider seeking out a service where the provider offers advice and counsel, in addition to delivering services. For example, if you’re looking to form a corporation, by choosing a provider that is willing to guide you while providing services, you get the best of both worlds.
- Peer Advisory Boards: One of the best ways I’ve found to get startup advisors is to ask peers and local business leaders you respect to be your informal advisory board. Typically you will find these advisors through networking and among your contacts. You may not be able to pay a dime. But you might be surprised at how many will say “yes” for the pure satisfaction of being able to support another entrepreneur! Don’t hesitate to approach someone and say “I am assembling a volunteer advisory board which will meet quarterly, and I respect you so much I’d be honored if you’d be on my board” or something to that effect. The worst that can happen is the person will be flattered but will say no.
Make it Happen
Don’t overthink getting a startup advisor. Sometimes just having someone to talk with can make all the difference in maintaining a positive outlook and growing your business. Make it happen!