Re: What do startups actually want from advisors/mentors/...

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Re: What do startups actually want from advisors/mentors/...

Hardeep Rai
Iqbal, Good morning,
 
I think you raise a good question...
 
Last year I had a few examples of this. I suppose, I have built a reputation (within a small circle of people!) of meeting a business for a couple of hours and then advising on whether or not I think they have a strong enough proposition that could work.
 
At this meeting I would insist that the entire team is present, so I can see all the people involved in the business and hear from all of them. Essentially, I ask them to pitch to me as if I was an investor and then I give them my candid feedback. At this meeting, I would also determine whether or not I could introduce them to other people that may be able to help them.
 
This I would deem to be advice.
 
In another example, I was so impressed with their business model, that I offered to try and help them fund raise, in return for a stake in their business. I produced their business plan for them and got them to a state where they were ready to pitch to an investor.
 
This I would deem as helping them to grow the business - so to use Joao's analogy, you could refer to this part as consultancy.
 
One could perhaps try to simplify things and maybe say that you are giving "advice" if the start up is "pre-funding" but helping then to grow the business once they are "post-funding". That said - I appreciate that's a little too simple and in practical terms doesn't really reflect the real world.
 
John - I also take you point about mentors having made their fortune before mentoring. I don't disagree with that. I happen to know a lot of mentors that are more motivated by being offered a small stake in something as this means they are a little more motivated to make the business succeed ! :-)
 
 
 
 




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Re: What do startups actually want from advisors/mentors/...

john barrett
I'd be more than happy to give a small stake in return for the benefit of experience but I think a lot of mentors would surely see that as a big risk to them not getting anything when a business is unproven. Most mentors I've looked at tend to work on a fee basis, unless I have been looking in the wrong place.

John B.







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Re: What do startups actually want from advisors/mentors/...

FTired
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In reply to this post by Hardeep Rai
John,

I think you are correct, its a risk vs reward, and remember the equity return is not in their hands, i.e you may decide never to exit, or you may get a VC who now changes the game from a say 3/5 yr play to one which is 7/10 yrs away, and since a mentor gets such small equity, after dilution in a couple of rounds, and paying the tax on any 'winnings' after say 7 yrs of waiting it will not really be worth that much.

Maybe in order to limit the risk the entrepreneur should offer equity with a conversion to cash after x period of time.

Iqbal



From: john barrett <[hidden email]>
To: [hidden email]
Sent: Wed, 12 May, 2010 6:08:01
Subject: Re: [entrepreneur-1056] What do startups actually want from advisors/mentors/...

I'd be more than happy to give a small stake in return for the benefit of experience but I think a lot of mentors would surely see that as a big risk to them not getting anything when a business is unproven. Most mentors I've looked at tend to work on a fee basis, unless I have been looking in the wrong place.

John B.







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