Advisors Stop Screwing Startups
I'm not sure when it happened. Maybe it comes with the territory. Or perhaps with the “tech bubble”.
It could have been the billion dollar valuations; or a secret dinner at Bin 38.
I wish I knew. I wish that the exact moment that becoming an advisor to a company became hip.
It may have arisen after the invention of the Internet Celebrity or perhaps its the fault of the accelerators and the rise of the mentor class.
I suppose at the end of the day, it just doesn't matter.
What does matter is this:
Advisors stop screwing startups.
The last couple of years, I have become amazed at the emails I get from first time entrepreneurs or long-time employees (“entrepreneurs by proxy”) telling me about the latest startup they are advising. That the founder of said startup gave them real equity in return for…well, hell if I know.
Seriously, what the hell?
When did the fact that your name that is barely known beyond your mom became valuable?
It is not cool to be an advisor; its a responsibility. It should not be treated like a fucking Golden Ticket.
My dad told me that as soon as you accept money, its no longer a favor, its a job. And advisors, you are not doing founders any favors, and even worse, many of you are failing at your job.
I know that you once had a post on the top of Hacker News. I know, right !?! Definitely worth 0.5% of a company.
I'm sure the fact that you know a guy that knows a guy that is the king of getting links, is worth your space on the cap table. I know!
Like everyone knows who you are! Like for real yo! You once tweeted at Shervin, and he tweeted back “@randomdude :).” You da man!
And, Founders, you don't get off scott free from this rant. In fact, you are even more to blame. Seriously, when did you get hit with the stupid stick on this issue?
When did it become a requirement to have advisors – any advisors?
I guess that now that there are a dozen new startups launching every day, the good advisors must be all taken, and so there are just not enough people going around that can truly be helpful.
“But, Micah,” you cry, “I asked all the big names, and they said they were busy! I need to have advisors! Don't I?”
First of all, if people who will spend real time with you and provide real value show real reticence to help you out, well you might want to spend some time understanding why. It might be you. It might be the product.
Second, you don't need advisors. Really. You don't.
Even if you decide that you need some help beyond what you are able to accomplish through friends and mentors, remember, you only have 100% of your company to sell. And, yes, every time you sign over equity you are giving/selling part of your company.
Which means, if I am doing my math right…hold on…carry the two…
If you aren't explicit about your expectations of what you are going to get from an advisor in return for the piece of your company you are giving away, well, then…founder = stupid.
“But, Micah, it's such a small piece of the company!”
Again, to be clear - YOU ARE GIVING IT AWAY WITH AN ALMOST ZERO RETURN. How does that reflect on your ability to run a company with potentially larger investors or important hires?
I mean, what message does this send? You buy the cheapest fridge in the world for your employees, but you give away equity like its candy?
Advisors, stop hurting startups by adding minimal value. Just because you can spell Andreessen Horowitz doesn't mean you are adding any value.
How advisors add real value:
1) Introduction to investors / business development (help with pitches) 2) Help the founder recruit top talent 3) Help the founder refine and articulate their vision / product 4) BONUS: Be a CEO coach.
1) You don't need advisors. 2) Stop picking advisors based on the perceived value of their name. 3) Focus. Focus. And if you have time, focus.
If you are going to be an advisor to a founder, especially a first time founder, please understand the trust that founder is putting in your hands. It should not be treated lightly.
Founders, be smart. Don't get caught up in the mess of it all. And, most importantly, read my friend Eric Marcoullier's post. He is much nicer than me.