Over the years, I have advised many companies. I`ve been asked a lot more than I said yes, I only say yes to companies I can add, that are in an exciting space, and the founders are great people you can work with. (Now that I`m an investor, I say no to almost 100% of requests to avoid a signage problem. However, I recently agreed to become a consultant to a company in which my skills uniquely qualified me to help.) Consultants may play a similar role to consultants, but are usually hired to perform one or more specific tasks or projects and are paid in cash. Why: If an «industry leader» is willing to dedicate their valuable time to your startup, they should also believe in the company, and investments are a great way to show that. This approach tests this belief and can potentially increase your lead. One option is a two-year investment schedule with a six-month pitfall, which means that if the relationship doesn`t work within the first six months and the advisor leaves, the company retains the equity. Finally, you must compensate the advisors to employ them. If your advisors want a large part of your business or a salary or a scholarship, they are not the advisors for you. Use the following matrix to determine how much the advisor should be compensated. First determine the phase your business is in: the idea, the startup, or the growth. The idea is usually pre-seed, startup is usually seed phase, and growth is typically a series A or later. (I will explain here the stages of financing) This is important because of the risk your advisor admits.
«They were effective in taking a Socratic approach, helping them unpack problems, asking questions, playing devil`s advocate, but ultimately leaving room for the founders to make their own decisions.» If you hire consultants in your startup, it`s worth making sure they can provide the help they promise – and most importantly the help you need. using the above-mentioned basic principles and this Consultative Agreement; You can codify your agreement quickly, without attorney fees….