Most entrepreneurs are well aware of the benefits of courting and engaging strong business and technical advisers. Then why is it that founders often fail to attract the best talent for their outside team? Often short-sightedness and lack of willingness to give up any control or ownership get in your way. Holding on too tightly may lead a founder to own something small, when your company has the potential to be much more.
What are the critical mistakes?
- Believing advisers should be passionate enough to give unselfishly. Founders can be like missionaries, with zeal and a sense of sacrifice that leads you to believe everyone around you should share your passion. Commitment is important, but founders need to understand that interest and involvement from an adviser can be valuable even if it has its limits.
- Not understanding the advisers’ motivations. Advisers are interested in your business, and want to help, but they likely have some motivation for getting involved. Perhaps they are looking for a good long term investment, enjoy getting to know fellow advisers, want to add to their expertise in your industry, or want to share their knowledge. All of these motivations are acceptable, and the sooner you understand how to meet these needs, the more likely you are to attract and retain engaged advisers.
- Being stingy on equity. Ideally a committed adviser is provided a formal agreement and token stock options. With as little as a quarter point of equity, the adviser is not hoping to get rich. But, an equity or option grant demonstrates that the founder values the adviser’s time and is willing to make a small sacrifice to engage the adviser’s talent, experience and advice. Would you rather have 100% of a company with a small valuation, or attract four talented advisers and have 99% of something huge?
- Relying on friends. While good friends or family members may be supportive, they are likely not objective and may have less relevant expertise than your business deserves. Resist the temptation to take the easy way out.
- Not sharing news – good or bad. Often founders fail to communicate because they want to protect their image, or they just get busy. But, learning news through a third party does not build trust. If results or competitive inroads are unfavorable, be the first to let your advisers know. Likewise, share good news quickly, and take the opportunity to celebrate together.
Advisers can open doors, build your credibility, provide a wise sounding board, and help you steer clear of landmines. Recruit and nurture advisers as a valuable asset, and reap the rewards.
Photograph courtesy of Gabriella Santander.