The Biggest Mistake you Can Make with Advisors

I’m an advisor and I agree. Sounds like a TV commercial from the 90’s, right? I’m a doctor on TV and in real life. But I’m being paid to be here. But in this case it’s the truth. I’m an active startup advisor here in Austin, TX for Greater Good Labs, Giving City Magazine and EdgeFlip and several other startups. And I help manage our team of advisors for the Weird Homes Tour as well.  And the people who are doing it really well actually hold me to what I say I am going to do. You can read more about advisors and advising at this great article.

But the highlights are below:

Why is an advisor agreement so important? It might seem like trivial paperwork but without one you’ll often lose an advisor’s attention to other projects — and at worst you can sour your relationship with someone who could have been a major asset.

• Valuing time. People who you want to advise you are, by nature, busy people with a lot of potential projects to work on. Time is their most precious commodity.  While advisors aren’t likely to get rich off a small piece of equity (nor are they planning to), you need to show you value their time and knowledge. And that is exactly what an advisor agreement does. It appropriately prioritizes the work you’re doing together, so you won’t feel like you’re pestering him or her for favors.
• Aligning incentives. For much the same reason that you give employees a piece of equity, you want to give an advisor the same consideration. As Fred Wilson from Union Square Ventures says employee equity “reinforces that everyone is on the team, everyone is sharing in the gains and everyone is a shareholder.” Same goes for advisors. It ensures you’re both working towards the same long-term goal and understand the company vision.