Advisors, as the name says, can give advice that becomes the difference between success and failure for an entrepreneur. But beyond words advisors can also provide several other values:
Originally published on “Data Driven Investor," am happy to syndicate on other platforms. I am the Managing Partner and Cofounder of Tau Ventures with 20 years in Silicon Valley across corporates, own startup, and VC funds. These are purposely short articles focused on practical insights (I call it gl;dr -- good length; did read). Many of my writings are at https://www.linkedin.com/in/amgarg/detail/recent-activity/posts and I would be stoked if they get people interested enough in a topic to explore in further depth. If this article had useful insights for you comment away and/or give a like on the article and on the Tau Ventures’ LinkedIn page, with due thanks for supporting our work. All opinions expressed here are my own.
- Credibility -- within your company and outside, including to potential hires
- Access -- to new people and opportunities especially potential customers
- Capital -- many advisors are investors themselves or have access to people who are
- Governance -- something really a board does but a benefit especially at the earliest stages of a company
- i) equity grant -- Something like 0.1% of the stock at the earliest stages (pre seed, seed, A) is typical, with the expectation the Advisor will give you about an hour a week. ii) vesting -- The standard for hires is 4-year monthly vesting but unlike them, Advisors often get a shorter vesting of 2 years. The idea is to make it easier for an Advisor to commit to ongoing mentorship and for the entrepreneur to be reassured they are not giving away too much stock. It’s especially unpleasant to break an Advisory agreement because it primarily involves a relationship of good faith. And if things work out really well, you as an entrepreneur can always extend the agreement. iii) cliff -- The standard for hires is 1 year cliff but for Advisors the cliff is usually absent. The thinking is they are not formal employees so do not add a barrier upfront to appreciate their time.
Originally published on “Data Driven Investor," am happy to syndicate on other platforms. I am the Managing Partner and Cofounder of Tau Ventures with 20 years in Silicon Valley across corporates, own startup, and VC funds. These are purposely short articles focused on practical insights (I call it gl;dr -- good length; did read). Many of my writings are at https://www.linkedin.com/in/amgarg/detail/recent-activity/posts and I would be stoked if they get people interested enough in a topic to explore in further depth. If this article had useful insights for you comment away and/or give a like on the article and on the Tau Ventures’ LinkedIn page, with due thanks for supporting our work. All opinions expressed here are my own.
I have been in Silicon Valley for 20 years -- at Samsung NEXT Ventures, running my own startup (as of May 2019 a series D that has raised $120M and valued at $450M), at Norwest Ventures, and doing product and analytics at Google. My academic training is BS in computer science and MS in biomedical informatics, both from Stanford, and MBA from Harvard. I speak natively 3 languages, live carbon-neutral, am a 70.3 Ironman finisher, and have built a hospital in rural India serving 100,000 people.