3.02 (V) 3.1 Mentors, Advisors, and Advisory Boards
Let's talk about mentors, advisors, and advisory boards. You don't want to do your startup alone, you need advice, you need help. Even if you're launching it on your own, or even with a group of people, you still need outside advice. You don't know everything. So that's where mentors, advisors, and advisory boards come in. Some of these people are paid and some are unpaid, we'll go through these. But research shows that connection to high status mentors makes a difference. Getting good advice makes a difference. It makes a difference psychologically, and it makes a difference in the impact and success of your startup. So the first category of people you want to consider bringing on to help you are mentors. Mentors are the people who help you with informal advice. Sometimes they'll give you connections and resources. But they're often useful just to have someone to talk to and get general advice on how to handle a problem inside your company, if you haven't seen it before. To even get psychological support, because being a founder could often be really lonely, and mentors can provide you with that sort of support and advice. Often mentors are friends, sometimes they're older individuals who have worked with you before. But they're mostly there to provide sort of general purpose advice and to offer some sort of coaching and help. You get them through starting with the people you know. So, hopefully, a mentor is your professional career. If not, it's time to start developing those people. Start developing those relationships. They can be people you know virtually, through things like social networks, but even better, people you've worked with, professors you've looked up to, bosses you've looked up to, friends you've looked up to. These are the people to start off as mentors. Advisors are different from mentors because they're paid experts who help with your business. Often they have narrow expertise in a particular area, sometimes are friends, but not always. And sometimes they can also help with important connections. More than mentors, advisors are people that you can mention externally to give you some extra status. So if your advisor is a prominent entrepreneur or doctor, or connected financier, those can be useful to you. But they also could be somebody like a specialized lawyer, or an expert in medical field, or an expert in running resultant if that your business. So the advisor is the paid experts that you bring in and help you with the payroll. You can find those through network connection as well, but it's great to ask other founders who have used or even just approached professionals with high reputations, because you're paying them, it's a lot easier to build these sort of relationships. Advisory boards are formal groups of people with outside experts who will help you with your business. They meet regularly to help provide advice and caution and help set you in the right direction. The best people to find your advisory board are high status individuals, people who are well known in your industry or even outside of your industry. Because those high status connections, we know, help give the status to you as a company, and make your company look more likely to succeed. Ideally, you'll find high status people actually care and want to help. If you can't find people who will care and want to help, the high status board can still be useful, but ideally you have people who really want to engage and help you out with your organization. There are many advantages that come from having an advisory board, the prestige of that board can wear off on you. If you have people who have achieved success in other fields, the fact that you have them on board will help bolster the idea that you're going to be successful, in this sort of symbolic manipulation way that we discussed in the lecture on the art of the pitch. But also, they can help provide connections. Sean Parker, one of the founders of Facebook, was on the advisory board of Spotify, and he helped Spotify get those connections to the Facebook social graph, and that allowed them to succeed. But they can also provide you advice and even sort of a note of caution as you go forward, because they've seen things before and help you avoid getting you in trouble in ways that could cause problems for you later. You'll find them the same way you do advisors and, again, you'll pay them. Now, how much you pay them? Usually, you pay them with equity. So the Founder's Institute has what they called the FAST agreement. You can look it up online. That's a standard advisory agreement. So this is something you're actually going to sign. And they have suggestions at how much you pay advisors, depending on the stage of your business. So just the idea of stage, the start of stage, or the growth stage, and how much help you're getting from these people. So are you just going to get regular monthly meetings, which is how often advisor board meets? Are they going to give you strategic advice where they normally have monthly meetings but they help you recruit people and hire people? Or are they going to be experts who help you with actual projects and give you information that helps you succeed as a business? So if they're experts, you might give them 1%, if they're helping you to succeed at the idea stage. If you're at the idea stage and they're helping you do recruiting, you'll give them a little less. And if they're just doing monthly meetings, you'll only give them a quarter percent. And this is usually straight up stock options vesting over a two year period. So you should expect to pay for your advisory board. So outside advice is going to be critical to your success. Everyone can benefit from mentors. Most people can benefit from advisors and helping them get advice in areas they don't have help already. Advisory boards, because they're more formal and you have to listen them, you want to make sure you're only doing that when needed. You're going to have to give up a decent amount of equity to bring these people on board. So make sure the advisory board is going to be useful to you. It's a good time to actually ask your advisors who should be on that board, you may want to do this, as you're trying to get fundraising or something else, but advisory boards is something you might want to construct later on. But mentors, bring them on board as soon as you can, and advisers, as soon as they're helpful
