Startups Stack Exchange Archive

Finding Advisor(s) without Too Much Publicity?

What is the best way to put together a board of advisors for a tech SaaS startup without too much publicity?

The reason I ask is that I would like to keep the project a low profile until its ready to roll. I’m trying to avoid too much awareness for the competition or to give others ideas.

I prefer to deliver “shock & awe” to competitors vs some “oh, new competition is coming, lets take them down before they get too big”.

For those reasons, I’m not interested in creating profiles on startup websites such as angel.co or sending out emails to every advisor/agency out there.

I’m a solo developer and since I live in a small town in the middle of nowhere it is not like I can just reach to some local startup experts, as they are just not here.

In regards to “hiring” advisors what should be the priority order.

Board of advisors

From the list above, do they all deserve equity or would be better to just pay cash some of those above and save the equity for future employees etc?

Edit:

Is it common to sign non-disclosure agreements with potential advisor before even talking any details about the project?

Answer 5844

Most advisors expect equity because startups are usually cash strapped and equity has become a norm. The equity doesn’t have to be big something from .1 or .05 to 1% depending on the stage you are in and how important the advisor is. If you are able to pay cash and want to save on equity, which is not a bad idea if you have cash, you can offer them cash. Say, a particular amount per consultation, or per meeting or per month/quarter. Be realistic about what you can afford and the value you are seeking to get from them. You can also set performance monitors and weed out non contributors. You can replace some advisors with consultants and you can save on equity.

NDAs do serve their purpose and if you are concerned with your idea being leaked out, you can ask for an NDA and to disclose conflict of interests. This is not unusual for positions like this and would help you get more from them as you can have more open discussions. Be wary about people who serve on multiple boards, refuse to sign NDAs, is too eager to discuss fees and payments.

There are many places to find advisors. Linkedin is a good place and many people list advisory roles and board positions in their profile. Other places to look for them are startup sites like cofounderslab, SBA in your state, friends, people you may know, colleagues, former bosses, relatives and family etc.

Be realistic about your need for advisors. You may not need them all at the same time and you may find that they take more time than you can afford. Add advisors based on your stage and what you are doing at present.

This site has a good discussion on the amount of equity to give to advisors - http://techcrunch.com/2011/09/22/free-startup-docs-how-much-equity-should-advisors-get/

Addendum

Determining which advisors to add

  1. Do not add advisors because it would look impressive to investors - This is the wrong reason to get advisors. You would disappoint the advisors, investors can tell and you would loose equity, time and money early on
  2. Get advisors to fill gaps - Identity which areas you need help with - if you lack technical skills, a technical advisor who has experience with your tech area would be useful. If you lack a business network, an advisor with industry connections might be useful.
  3. Assess when you would need the advisor - You may not need an HR advisor if you are building your prototype in your basement/garage lab. Figure out when you would need advisors and get them only when you would need them. A good way would be keep a list of potential questions you need to clarify and sort them by category. You would find that you can answer most these questions online or with a little research on your own. If a particular category keeps growing, and the need for getting answers to that category becomes pressing, you can consider getting an advisor
  4. Do you need an advisor - Sometimes all you need is someone to run things by, gripe and vent or to get some feedback. You may not need an former Fortune 500 CEO or a retired UCLU professor for that. A good friend, a spouse or your mum might be enough.
  5. Consider other sources of advice - you can find good sources of advice online or even connect with experienced people on forums and QA sites like this who can help you. If your need is a one of thing like say a patent or a legal contract, product design etc, you can hire a lawyer or a consultant for a single consultation. There are several advantages to this, including the flexibility to shop around.
  6. Don’t be quick to add a recurring expense or give up equity - If your startup is pre revenue, be careful about the recurring payments you add. Your equity may not have much value now, but later may have more value later. Loosing equity can also lead to you loosing control of your company depending on the rights of the shares you gave away.
  7. You can outgrow your advisors - If you got an advisor today to help you with some technical difficulting in the startup stage, you may not have need for him 3 years from now and your business has matured. Have a system to end advisory relationships.

To sum up, exhaust other means of getting advice before getting an advisor, assess your needs and your system for managing advisors before getting one.

It would be hard to suggest which advisor you need to start with without more information. Judging by what you have told about your situation and how you are going solo, I think you are confident of your skills and abilities. So, you may not need a technical advisor to help you make your product. If you cannot figure out production aspects of your product, that would be an advisor with manufacturing experience might be helpful. If you have finished your product but you do not know how to sell it, then, an advisor with business development experience in your industry or product category might be helpful. It depends on your skills and the stage your startup is in.

Answer 5842

First, all of the listed positions are very important and I, honestly, can not emphasize on any one in particular. You are missing a business development from the list - the person who should advise you on a mid to long term development and how to effectively bring all the marketing, product, engineering and business ops together. Plus, you might want to have someone advise you on business intelligence and analytic as well.

As to compensation - it should be decided per each individual contribution. It depends. Some people do want to receive something for their mentoring and advice, some want to just participate for the sake of sharing knowledge. It is rather individual - for example, I don’t usually ask for any compensation except for maybe a small mention that “this guy threw in a word or two to help this thing roll”, unless someone is actually asking me to spend 20 hours a day working on the given project.

As to NDA’s - it is not very common among “barn-born ideas”, but it isn’t unseen either. If you can pitch well, potential adviser could be into signing the NDA, but usually, you just have to have some level of trust in people you choose to be your advisers. People who are actually into mentoring aren’t really that much into the business of stealing ideas - there is plenty of mentoring events around in the world, like, TechChill Baltics and Startup Weekend, where people like you actually go on stage and openly pitch their ideas in pretty detailed way to get advice, funding and for publicity. If everyone out there would be out there just for the ideas, venues like that would not possibly exist and open startup ideology either. So, essentially, this boils down to trust. Keep a low profile if you must, but sometimes a little publicity will not hurt you - quite the opposite.

Answer 5887

Investors will be able to provide access to the majority of advisory services.

The fact that sales is on that list is scary though. All business is Sales, and sales should be internal not external. You need to know your customer better than any other company.

Given sales are on the list, I’d suggest you really need a business cofounder.

Also, I’m not sure where you will be looking for investment, but here (Ireland) having traction (ideally actual sales) is the best way to get investment without giving away too much equity.

Trying to be overly low profile hurts both learning about your customers and gaining traction.

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