Let's talk about founder advisor relationships - worth it or not?

SDS 005: Clarifying Founder Advisor Relationships

Hey! thank you for reading issue 005 of Startup Definition Sunday (SDS).

SDS is the newsletter for founders, bringing you clarity one actionable tip at a time.

SDS arrives every two weeks (you guessed it) on Sundays.

In every issue you can expect:

• 1 Definition of startup jargon

• 1 actionable tip you can implement right away

• 1 article on Africa tech that you should read

• 1 gift for founders

Let's dive in:

(PS I'll never sell your information, ever)

Yesterday, I spent a few hours in an advisory and strategy session with the Tech Chef Africa team working through their Q1 planning.

The right advisor can bring expertise to supercharge a startup's growth. Unfortunately, most early stage startups wait until they are raising their first round to find advisors.

That is a mistake, but first:

What is the role of an advisor?

Advisor: someone with expertise or access in an area that is aligned with a startup's goals, and is willing and able to support founders reach those goals.

What makes the right advisor?

Come, let's get real for a second:

Just because someone has 1000s of followers on instagram or has raised tons of money for their prior startups, doesn't automatically mean they would make a great advisor.

Every founder knows at least one person who came highly credentialed but just didn't fit. You don't want that in an advisor.

The number one trait you want in an advisor is "alignment to startup's goals". Simply put, if your goals for your startup is to grow your audience or community, the right advisor should be someone who can help you reach those goals.

Founders, you are the expert in what you are building. An advisor should be there to support and challenge you on the way to your milestones - not disrupt your entire plan.

Why do you need an advisor?

You don't need an advisor. You can most definitely build your startup on your own.

However, building anything - Rome or your startup - is always a collaborative effort.

The right advisor could be great for you depends on how far you want to build your company for and the level of impact you want to have with your company.

But, forget the cliche around teamwork. The right advisor can be a great business decision:

You get all the expertise of consultant-level support without paying KPMG prices (seriously, who is paying these KPMG prices?!).

The right advisor can unlock business development partnerships, help prepare you for fundraising, connect you to PR opportunities...the list goes on.

I know what you are thinking: how much will all this cost me?

Have you heard of the FAST template?

I have good news - you usually don't have to pay an advisor a dime.

Sure, if you engage someone professionally to help you fundraise, you might pay them a success fee. But that is a transactional relationship.

I am talking about advisor relationships that are with you for the long haul. The people who see where you are going and want to partner with you to get there.

Okay, so back to paying advisors. You can pay advisors in future equity.

The Founder's institute recommends a range of 0.25% to 1% of the company in the form of restricted stock or options vesting over a two year time period.

If trying to put together such an agreement sounds like way too much work, the Founder Advisor Standard Template (FAST) is here to save you.

The Founder's institute put FAST together to help founders establish these advisor relationships. Access the template here (always check with your lawyer for local laws and context).

I can hear what you are thinking again:

How can you engage an advisor?

You come here for one actionable tip so let me get to it.

The best advisor relationships are born from mutual interest alignment and respect.

Some of the best advisory relationships I have had came from founders whose work I respected and whose mission I believed in.

As a founder, the work to finding the right advisor is a combination of:

• doing the right research to identify potential advisors

• getting connected via warm intros if you don't know them already

• intentionally building relationships with these people

• and, if there is mutual alignment and respect, floating the conversation of an advisory relationship

Don't forget to formalize the conversation with an executed FAST.

So, are founder advisor relationships worth it or not? You tell me.

If you decide to find an advisor to support your startup's goals, reach out to me and let me know how it goes.

If you already have an advisor, what is the biggest value they have added to you building journey? Let me know on twitter

If you only read one thing this week, read this...

This is an oldie but goodie, especially as African founders continue to imagine what the future of technology could be on the continent.

Check out this article by Emeka (founder Afridigest HQ & co-founder of Gozem) on where African founders should be modeling their innovation evolution after - spoiler alert it is not Silicon Valley.

Takeaway: I agree with Emeka's view here. There are definitely similarities between Africa and other Eastern markets. African innovators still have to build for a uniquely African consumer - that is the real challenge.

Founder's Corner

If you're raising your first round and are not sure how to find investors, here's a database of investors that have done deals in Africa.

Max and Max have been updating this database since 2019 for deals done in Africa. It's a fraction of the cost of Crunchbase or Pitchbook (Disclaimer: I use it myself)

Thank you for reading to the end of issue 005.

Don't be shy to go out and find an advisor to support you to reach your goals.

If you enjoyed reading this, or I missed something, hit reply - it's always great to hear your thoughts on the issue!

Let's chat again in two weeks,

Jasiel