Once, the founder of Dendy, the game console of the Japanese company Nintendo, said, “If Dendy had an adviser, this business would be alive.” Why does a startup need an advisor? 90% of startups die at the pre-seed stage. Of those who reach the Seed stage, another 75% will die.
In our new article, we will discuss everything related to startup advisors, who they are, their primary roles and responsibilities, how they can assist your company and projects, and many other things.
Who is a Startup Advisor?
Let us begin with a startup advisor job description.
Startup advisor is an expert who helps startups complete strategic tasks from the area in which the team lacks competence: industrial, technological, financial, geographic, etc.
The classical startup formula is a high potential for development, compounded by a lack of expertise, skills and resources. You should know the market well, decide quickly, have valuable connections, and build company processes efficiently to get started.
However, the young company does not have the opportunity to hire all the specialists necessary for this. And by doing everything on their own, the founders make thousands of common mistakes, because of which 90% of startups fail. You can get the missing knowledge and competencies without spending a fortune by contacting an advisor.
The Startup advisor: How Can This Specialist Help Your Project?
A startup advisor is a quite valuable link in startups. This person is useful both for startups just beginning their development path and those who have already started to transform their idea into reality. Let’s consider how advisors can help your project.
For a new idea
Startups that are just starting to develop need a startup advisor the most. Usually, such companies do not have the necessary expertise in all areas critical to building a business.
An advisor offers deep industry knowledge or skills and talents that you don’t have. A valuable advisor is someone who complements you, expands your expertise, and compensates for your shortcomings.
Startup advisors can provide young companies with:
- networking with necessary for your company business people;
- marketing tips;
- tips for finding investors;
- product development tips;
- team building tips.
The advisor is also an excellent decision-maker. Based on experience and awareness, the specialist can help you choose the most suitable option for your project in any matter.
Also, a business startup advisor can help you during the hiring process. Startup advisors usually know what kind of people companies need and what skills and expertise they need to provide.
An advisor can help you create a strong team that will successfully develop any kind of project. An expert can provide you with pricing policy, accounting and legal advice as well.
For the current product
A startup advisor is also vital for companies that already have a product. An advisor can open doors for your company and product to potential partners, investors, service vendors and key personnel simply by introducing you to the right people.
For startups that are engaged in complex technology products, involving a startup advisor to the team is a must before going to an investor.
A startup advisor can provide companies with:
- strategy for product scaling;
- marketing and automation advice;
- audit conducting;
- advice on how to enter new markets.
Moreover, business startup advisors may use some international expansion methods to make your product known to the whole world.
What Are The Responsibilities And Roles Of A Startup Advisor?
We have already discussed how a startup advisor can help businesses. Let’s now talk about what startup roles and responsibilities the advisor has.
Startup Advisor: Project & Business Planning
After studying the idea, project and startup opportunities, the startup advisor provides project and business planning. The specialist helps to put everything in its place and plan all business processes. Planning helps to understand what budget and how much time is needed to complete the project.
For a person who already has experience in products and working with them, namely for a startup advisor, the business can be divided into 4 areas:
- The owner. An advisor acts as a general manager and the decision-maker.
- Sales. The specialist evaluates how everything works and how to do this process better.
- Development and growth strategy.
- People. Startup advisors help in evaluation and hiring.
Around these 4 areas, planning takes place.
Startup Advisor: Project Auditing
Project audit is helpful at an early stage in the development of a company. Even at the pre-seed stage, an experienced auditor will understand whether the startup has a future, if it maintains the current vector of development, and what needs to be adjusted for the project to become successful. As a result, the startup can save time by avoiding mistakes.
Startup advisor can help find out:
- does the market need your product;
- how much investment needs to be attracted;
- where exactly investments should be directed;
- does the team have enough competencies;
- how well the business model is worked out.
The business startup advisor will identify the weaknesses of the project and give recommendations that will point the startup in the right direction and save it from mistakes.
Startup Advisor: Hiring process
Finding the right and talented employees is not easy. Startup business advisors can provide support in finding skilled professionals and help with such processes:
- compilation of a list of requirements for future employees;
- recommendations for search channels;
- creation of test tasks;
- conducting interviews;
- assessment of professional qualities and skills;
- defining and managing KPI;
- assessing lack of competence;
- offering their own search channels for hiring new employees.
Moreover, a startup adviser will help with hiring specialists for marketing, finance and legal departments.
Startup Advisor: Product design
One of the startup advisor responsibilities is product design assessment and analysis. They help:
- evaluate design team members and how well they are doing their job;
- build a good environment for design development;
- evaluate wireframes;
- evaluate the design;
- evaluate the logic of the product.
An advisor’s primary tasks include identifying the problem, developing the method for fixing it, and assembling a design team. An advisor may help with consumer research, focusing on solving the problem and encouraging empathy for the target audience.
They may assist in narrowing the scope of work, prioritizing the feature set, and developing a product roadmap that satisfies both company’s goals and customer demands.
Startup Advisor: Development Process
During the product development stage, the startup advisor supports the development team and ensures everything is done at the best possible level.
What exactly does the advisor do at this stage?
- An expert advises and tests the existing team.
- An advisor helps find new people at the product development stage.
- He makes sure that all the standards that were at the design stage were followed.
- He advises how to manage the development process
- The startup advisor provides checklists and examples.
- He can help with choosing the right technology stack.
Startup Advisor: MVP creation
To create a great and efficient MVP, startup advisor can help:
- hire new team members;
- set an MVP checklist (the most important questions you need to have answers to);
- define core functionality;
- cover three essential areas: reliability, usability, user experience;
- adjust the design and development process;
- define main features;
- conduct testing;
- analyze the results.
Startup Advisor: Pitching
Fundraising from investors is a time-consuming and challenging process. As a result, it is critical for a business to develop a strong investor pitch deck by telling a compelling and intriguing tale.
One of the advisor’s roles is to assist in creating a pitch deck. A good expert will help your company win the hearts of investors and make them believe in your project. Experienced advisors know what investors want to see and hear, so it is not difficult for them to create a pitch deck, which will contain the most important, relevant, and most importantly, valuable information for future investors.
Startup Advisor: Investor searching
Also, startup advisors know where to look for investors. They can help in the search as well as in the selection. Experienced advisors know which search channels to use and how to contact potential investors.
In addition, business advisors can help with negotiations. Investors need a special approach. An advisor is exactly the person who knows how to get the investor’s favor for the project and get investments.
Startup Advisor: Project Scaling
Startup business advisors provide support after the product is released. During project scaling, they can help:
- receive funding for future development;
- get rid of processes that don’t work anymore;
- automate processes to make them more effective;
- create a marketing strategy;
- solve technical and design issues;
- create a scaling strategy.
A startup advisor can also share his experience on how everything in large companies should work. Moreover, they help build a corporate culture that is extremely important. Scaling your project may be difficult. However, if you employ a startup adviser to guide you through the process, you can make it smoother and less stressful.
What Are The Benefits Of Working With A Startup Advisor?
We have already figured out the main responsibilities of a startup advisor and what role this person plays in different business processes. Let’s now consider what you get by hiring such a specialist for your project.
There are several ways in which a business startup advisor may bring value to your business and help it scale. Here are just a few of the reasons that come to mind:
Knowledge and skills that you do not possess
A startup advisor becomes a mentor for you and your business. He can share his experience and deep knowledge. You can always ask for advice and discuss all the pressing problems associated with your project.
Close and valuable connections
Business startup advisors will be able to open doors for you and your company to the world of investors, partners and other important people who will help your startup grow.
You get a friend with a startup advisor on board who will be with you constantly through hard times. An expert will enable you to prevent severe mistakes throughout your project development and enhance your success chances.
How to choose a quality startup advisor?
How can you identify advisors and select the best one for your startup?
To be a startup advisor requires to be a responsible and dependable individual.
But how to choose such an advisor among a large number of specialists? What qualities and skills should a startup advisor have? Let’s try to find answers to these questions.
Startup Advisor Main Skills
To find the best startup adviser, evaluate your strengths and limitations, as well as the areas in which you require the most specialized assistance.
Here is a list of talents and skills that your prospective startup advisor should have:
- Excellent coaching skills. Instead of just addressing your questions and solving your problems, competent startup advisers counter-question you with vital questions that force you to think outside the box.
- Deep industry knowledge. Extensive market knowledge will not only improve strategy planning but will also assist you in making wise decisions. Furthermore, their engagement in your organization will assist you in making the most use of your professional network and avoiding major mistakes.
- Deep passion for your company business. Find someone who isn’t primarily motivated by a desire to make money. An excellent business startup advisor is not just reliable and honest but also skilled in leadership and driven by a strong enthusiasm for your company.
- Communication talents. Having a skilled startup advisor in your team may be quite beneficial. However, when it comes to expertise, you must guarantee that the professional also has strong communication skills to transmit that information effectively.
- Good reputation. We are sure that you do not need someone who has failed several projects and has a bad reputation. Pay attention to the feedback from previous clients and the results of the specialist’s work.
- Excellent networking talents. A great startup advisor keeps you in touch with the proper people and resources, allowing your business to grow more quickly.
How to Hire a Startup Advisor? [Quick Guide]
We have already discussed the main topics related to startup advisors. Now let’s figure out how to hire such a specialist. To make it easier for you, we have prepared a small guide that will help you.
The goals of the startup
For example, do you need someone with profound marketing skills or accounting knowledge? Or are you looking for someone who can help present your project to investors? The answers to these and other questions will determine who you need to search for.
In the hiring process, clarity and organization are vital. It is essential to be clear about your goals. If you do not do this, the candidates will not be able to understand exactly what you want and help you in the future to carry out all your plans.
Your current problems and weaknesses
Concentrate on your weaknesses. What knowledge would you like to gain from a startup advisor? What problems related to your project would you like to solve? What do you want to improve, and what are you missing?
Think about what result you want to get and how quickly you want to get it. If there is no precision in these things, your future collaboration with the business startup advisor will be of no benefit.
Requirements for the advisor
The next step you should take is to draw up a list of the essential requirements. List the essential qualities and skills that your startup advisor should possess. There are no ideal specialists who can do everything. And if there are, then they have a project queue for several years ahead. Therefore, it is vital to highlight the basic and necessary knowledge and skills needed to complete your project.
Choose the best places to search
In general, there are two ways to find a startup advisor. You can find a company that employs different specialists, including advisors. Or you can find a freelance startup advisor, a person who works for himself.
The easiest way to find the specialist you need is through social networks, such as Linkedin. You can also visit profile events or forums. Usually, there is a very favorable atmosphere for communication, and there is a chance to find a good specialist. Also, you can simply use the Google search and search online, comparing work experience, rating, or reviews.
When you find the startup advisor you want, prepare well to convince them to work with you. Formulate your idea well and prepare a small presentation that can show that your project is worth spending time on.
Evaluate according to the main criteria
Next, you should evaluate your future employee according to the criteria you have chosen as the main requirements. The startup advisor must suit your company and your project as much as possible.
It makes no sense to involve a person who has no experience working with something similar to your project or does not have essential qualities. It is better to spend a little more time looking for a suitable specialist than to waste time correcting mistakes or solving problems that may arise during your cooperation.
Startup advisor agreement
The aims of an advisor relationship might be rather ambiguous. Assist you and your advisor in getting on the same page by putting together a written startup advisor agreement that outlines:
- the domain of competence of the advisor;
- what they will do for you and your project;
- what part of the startup advisor equity (if any) they will get;
- what startup advisor compensation they will get.
How much equity do startup advisors get? Before promising equity, ask a potential startup advisor whether they would rather invest in your business than take equity. Investing directly offers them more skin in the game and provides an important signal to potential investors.
If you have any questions related to the startup advisor agreement, contact us. We have a wealth of experience working with startups and advisors, so we can provide you with some recommendations and help you avoid mistakes.
Evaluate the quality of work
Throughout the cooperation with the startup advisor, evaluate the work. Pay attention to how well he conveys his ideas and communicates with the team, what results you get, how quickly your project is developing, what positive changes you can note, etc.
Do not waste time if you notice that the business startup advisor does not cope with his tasks or does not meet the criteria by which you chose him. It is crucial not to waste time but to find a truly reliable and valuable specialist.
How much does a Startup Advisor Cost?
The last question we would like to discuss is how much money you need to hire a startup advisor. Advisors are often compensated with one of the following:
Depending on the size and stage of your startup (as well as the scope of the advisor), companies frequently offer the advisor a 0.25 – 1 percent equity share. Provides a significant incentive for the advisor to constantly promote the business to increase the value of their stake.
While it may be difficult at first, fees for advisors may be a very effective and efficient investment, increasing your team’s brain capacity and experience without adding another salary.
Overall, if you’re searching for someone who will perform a fantastic job for your business, a startup advisor might be a very feasible option. A startup advisor’s responsibilities range from offering good advice to assisting with recruiting, coming up with fresh ideas, and creating new connections.
Like any other partnership, your collaboration with the advisor will necessitate energy, mutual respect, trust, communication, and dedication. So don’t put it off any longer and hire the appropriate specialists to get the most out of your business.