Guest Blog – The Advisor’s advice about Advisors.
By: Elie Finegold, Real Estate and Technology Entrepreneur
Through hard work, probably a connection or two in common, your compelling business model and execution plan and last, but by no means least, your winning personality, you’ve gotten me (or some other industry expert/influencer) to join the Advisory Board of your startup/growth company. You and I have probably had a handful of conversations, and a couple face to face meetings. You may not realize this, but your new Advisor has probably talked to some of your investors, customers and partners, as well as sought a second opinion from other experts in the business. And we’ve reached and signed a fairly standard agreement giving me a piece of equity in your business in return for access to my experience, connections, and insights.
Now what? How do you maximize what I, as your Advisor can contribute to your company, while ensuring that I remain engaged and motivated to help your company succeed?
Here are some practical tips gathered over the years. I’m guessing there are some founders out there who will recognize where they came from, for better or for worse. Consider this my gentle nudge, or quiet applause.
Also, I know the tone of this is direct, but I’m trying to write in the same, clear voice I use when advising portfolio companies. Just ask any of them.
#1 No Surprises. Ever! I cannot overstate the importance of this tip. As your Advisors, we expect to hear about every significant decision or milestone before it becomes public. We don’t want to learn about it from social media, or a press release or, god-forbid, one of the relationships which we entrusted to you. If you’re going to announce a strategy change, investment, or new partnership, take the time to inform your Advisors before it goes public. A short simple clear note will do, delivered early enough to process the information and ask questions. This will help keep your Advisors happy, prevent them from feeling neglected and, most importantly, allow them to both advise you (see what I did there) and help you communicate your news to the market. It can be a major asset to your company if you use us well, and it can damage your reputation if we feel surprised, because we’ve attached our reputations to whatever your company does. Yeah, sometimes we hit back – and we can hit harder than you, otherwise you’d be advising us.
#2 Respect Our Relationships. One of the most valuable things an Advisor brings to the table is their network of financing, partnership and customer relationships. These networks are built and nurtured over years through enormous efforts – by proving our value, being honest and kind, taking time to create a personal connection, adding value in every interaction, and being there to help when needed. They are our most prized professional asset, and often our most personal professional relationships. So please, don’t screw them up. Don’t ask us to reach out to our network for something, only to change your mind after the fact. Be polite and be responsive. Keep us informed of all significant interactions you have with the introductions we’ve made. And remember, they’re our relationships – if you screw it up, we’ll hear it from them first. That is not a good thing.
#3 Stop Selling. If we’re on your Advisory Board, we’re sold. When we send articles about competitors or the industry - unless there’s a specific note attached - we’re just trying to keep you informed about the environment around you. We’re probably not trying to start an unstructured conversation in the middle of our busy schedules, and almost literally actually never because we want to hear you explain why you’re better than everyone else again. We’re not hype-people when we’re talking with you. We don’t want to praise you for your strengths. Although we will certainly celebrate your successes, we really want to help you better understand the world in which you’re operating and identify and improve upon your areas of weakness. Neither of us gets any value when you try to just sell over them.
#4 Be Responsive. This one is pretty basic to all relationships, but especially crucial in the Advisor scenario. If we offer to do something for you, answer in a timely manner, because these things have a clock. If we spend time writing a long email to you and your team with extensive comments and analysis, do two things – acknowledge the contribution quickly, and respond thoughtfully when you have time. We’ve just spent hours working, trying to give your company ideas to help you navigate a thorny issue, so tell us you’ve received them, then show us you’ve thought about them.
#5 Understand Our Limits. We’ve committed to helping you as an Advisor but in some cases, it goes deeper. Maybe we’re helping you prepare for fundraising by reviewing your deck and pitch, maybe we’re hand-holding the acquisition of a customer or strategic partner, maybe helping you recruit a key position or solve a thorny management problem. There’s a point at which we’re doing significantly more work than we agreed to. There’s no clear bright line here but, in the words of Justice Stewart, you know it when you see it. Be proactive. Ask if it is too much or offer some additional compensation for our above-and-beyond efforts. If we have to ask you, we’re probably already pissed. Get ahead of it.
#6 Keep Us Connected and Informed. One of the reasons Advisors work with startups, beyond helping you succeed, is to meet new people, be engaged with interesting ideas, and forge new creative connections. The best thinking comes from good conversations, and if you do it right those conversations will be between each and all of your Advisors, board members, senior executives, and you. We are Advisors to the Company, not to you the CEO – so engage us accordingly. Find opportunities to get us all together, in person occasionally, online or by phone regularly. Send out regular updates to the entire group (which also helps avoid surprises). We can do more for you together than we can alone, so when it’s appropriate, make it a group conversation. You’ll get much more from the relationships, and so will we.
#7 Have an Agenda and Send It in Advance. When we sit down or get on the phone to spend focused time together, you’ll get a lot more from it if you have an organized agenda for us to discuss, along with some free-form time at the end. Get your facts straight and demonstrate that you have begun to think it through. If you’re really on your game, you’ll get that agenda out by the night before the meeting. That way, we’ll have time to get prepared and will have thought through the issues. Rather than getting our first reactions, you’ll get our thoughtful insights. Remember, the separation is in the preparation.
#8. Be Candid, Be Honest. We’re here to help you with your challenges, but we can’t if you’re not open about them. Candid dialogue will allow us to engage with you on your thorniest issues because, if we’re advising you, we’ve probably been through something similar, and have a relevant idea or two to contribute to the discussion. Patience and communications build understanding and teamwork. Help us understand your business – you know it better than we do and our judgement, which is ultimately what you bargained for, is more useful when we appreciate the circumstances more fully. And I know it goes without saying, but I will anyway- never, ever, ever, lie or obfuscate! That is the worst kind of surprise. (See #1.)
In summation, Advisors can be an enormous asset to the growth of your business if utilized well, but it takes thought, sensitivity and, like any relationship, continuous tending. We do this because we genuinely want to help entrepreneurs and companies grow, and we are interested in you, your ideas, and your future. But it is also an investment, of time, relationships, our personal brands and our intellectual capital. You are the fiduciary of that investment, and you should always treat them accordingly.
Hopefully you’ll heed this Advisor’s advice. And even more hopefully, we’ll start a conversation from Founders about how Advisors can best serve them.
As your Advisor, I’m all ears.
Enjoyed reading this article? Read more from Elie.