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So You Wanna Advise Startups? Here’s How to Do More Good Than Harm.

The advisory relationship is one of the most helpful and misunderstood relationships in the startup world. Here’s how to get involved if you’re a domain expert and a mensch and why to stay the fuck away from founders if you’re not.

Matt Munson
Matt Munson
6 min read
So You Wanna Advise Startups?  Here’s How to Do  More Good Than Harm.

The advisory relationship is one of the most helpful and misunderstood relationships in the startup world. Here’s how to get involved if you’re a domain expert and a mensch and why to stay the fuck away from founders if you’re not.

What is the advisor’s role, and is it a fit for you?

If you’ve developed some expertise in a particular area of business building, or if you’re a current or prior operator, advising can be a great way to give back to the startup community, make new relationships, and even explore opportunities for angel investing or full-time roles.

That said, coming from a prior founder, please avoid these common mistakes and recognize that if you are taking on an advisory role your primary job is to be a mensch: your focus must be on being of service to the company.

If you’re here for an ego boost or to tell others what to do because you’re experiencing a mid-life crises or dissatisfaction at home, please look elsewhere.

The advisor’s responsibility

Especially if you aren’t a prior founder or CEO yourself, it’s critical before entering into an advisory relationship that you familiarize yourself with and build empathy for the incredibly challenging journey an early-stage team is on.

Advisors who can’t begin with an empathic understanding of the journey will do more harm than good in an advisory role.

The responsibility here is to put care for the company and the team ahead of your own ego.

Yes, you have expertise. Yes, you deserve to be recognized and compensated for your effort. But there are thousands of people out there with expertise. What makes great advisors different from mediocre or harmful advisors is a willingness and ability to show up with empathy and humanity for the company that’s engaged you.

Your aim should be to make the short list of people the CEO or founders call when they’re feeling alone on the journey.

You can get there by ensuring you’re showing up with clear headspace for your time with the company and making sure that you’re focusing your effort on  deeply listening to what they share. Seek to understand more than to be understood. Listen 3-5x more than you speak.

The importance of clarity

Before beginning an advisory relationship, it’s critical to slow down and get to clarity on exactly what the company is looking for. Just as you would for a new job, ask for or co-create a job description and list of accountabilities for the advisory role. Work with the CEO or team to create a list of objectives and some success criteria by which you’ll know whether or not those objectives have been met.

This effort at clarity will pay major dividends as the relationship progresses. Most importantly, it will allow you to engage in the work with a shared understanding of what matters most.

After the job description is drafted and the key goals are set, assess honestly whether you’re the right person to help. If this process raises any concerns, talk through them openly with the company. Better to part ways with honesty than to fake your way through an effort that’s doomed from the offset.

Some of the people I respect most in the startup ecosystem are those willing to say ‘I don’t know enough about that, but I have a couple people in mind who can probably be helpful; let me connect you with them directly.” Aim to be that kind of advisor.

How to manage the relationship

Part of the clarity setting should be determining the cadence for check-ins or working sessions with the company. If the company doesn’t suggest it, ask if there is a regular weekly, monthly, or quarterly update the company sends out that you could receive in order to stay abreast of the broader journey of the company. This will help give you context for your work.

Beyond these regular check-ins, the best advisors recognize that startup leaders, and CEO’s and founders in particular, are on an often-lonesome journey. Even as a very people-centric CEO with a lot of close friendships around me, I was surprised how many hard days I found myself wishing more people around me were checking in on me.

As a founder going through the hardest days of startup life, the days and weeks can be surprisingly slow and difficult. The loneliness can be staggering.

If a startup has asked you to advise, consider your domain expertise secondary. If you want to be true gold to the company, be the person that checks in on the people.  Ask the CEO, or whomever you’re working with , how he or she is really doing. And ask a few times in a row until you get the real answer.

Be patient. Be willing to listen. Be willing to hold space without needing to override their experience with your own narrative or discomfort.

Just be there. And be there as often as you can.

Remember, this is a journey that is challenging enough to one’s sense of self and sense of one’s place in the world that it has made some of most talented among us suicidal. Check in on those founders like it’s your fucking job. Ensure they won’t be left alone on your watch.

Embrace the complexity.

So you have some experience, and some expertise. That’s just great. Really. But if you’re worth your salt you realize all teams, companies, and markets are different. What worked in your prior company may have no bearing whatsoever on what’s happening in this company today.

That doesn’t mean your experience isn’t helpful. But it’s just data. Data that gets fed into the training algorithm of this team in this company today as one thing that worked once upon a time someplace else. Nothing more.

It does not fucking mean it’s the right answer here today.

Please, advisors, read that last sentence again.

Even if you find a founder asking you for the right answer to their situation, do not offer one. Caveats are your friend here. A right answer will 99% of the time do more harm than good. I don’t trust myself to suss out the 1%, and you’ shouldn’t either.

This is where sentences like ‘I’m happy to share how we thought about it and what we chose to do, but I don’t want to be prescriptive here because this is a different time and place,’ can be very helpful to both you and the company. Especially with first-time founders who are still suffering with the right answer trap.

Lean into holding awareness for the company around the complexity and around this gray zone. The best advisors will, and you should aim to be one of the greats.

How to ask (or not ask) for compensation

Recognize that founders are inundated with service providers, investors, and would-be advisors who are all looking for a piece of the action. Either in the form of equity asks or cash.

Once you raise a little venture capital, it seems all the crazies come out of the woodwork looking to break off their piece.

You want to be different.

In my experience, most great advisors asked for no formal structure or compensation for several months at minimum. They focus on giving value and being available to help. They try to be mensches.

If you’re providing real partnership and value, most founders will proactively offer equity compensation fairly early in the relationship. If they don’t, I won’t fault you for asking to formalize the relationship a few months in. That’s entirely appropriate.  But don’t ask over your first coffee. And don’t ask before you’ve proven you actually are able to be a real partner and deliver real value.

When to gracefully end advising relationships

If you sign up for an advisory role with a company, take the commitment seriously. Stand by what you commit to around check-in cadences, workload, and availability.

If you find that:

  • You cannot stand by your commitments to the company
  • The company’s values prove to be a mismatch with your own
  • The company’s stage or challenges evolve such that you find you cannot be truly helpful
    Then it’s time step back and have an honest, open conversation with the company. It may be time to formally end the advisory relationship. This is a place where gratitude, humility, and real authentic conversation is incredibly helpful.  Be of service to the company to the very end by freeing up equity and the company’s time. And no need to end the newly found friendship.

Advisors are life-saving to early stage founders. They help bring clarity and awareness to blind-spots. But more importantly, the best ones bring real partnership and friendship during the most challenging days of startup life. Aim to be great. Your friendship is needed.

This is the second part of a two-part post. You can find part one, 'How should startups work with advisors?,' here.

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