Starting and running a business is a thrilling journey, but it can also be fraught with challenges and uncertainties. One essential aspect of building a successful business is seeking guidance and mentorship from experienced individuals who can provide valuable insights and advice. When you operate a business with a cofounder, finding an adviser becomes even more critical. However, not all advisers are created equal, and there are certain key considerations when selecting the right one. In this article, we’ll explore why it’s crucial to have an adviser, and how to pick the perfect one for your business.
When it comes to selecting an adviser for your business, one of the most vital considerations is their neutrality. It’s crucial to find someone who is neutral to all cofounders. This means avoiding the temptation to rely on close friends or family members, such as siblings, or your cofounder’s best friend. While these individuals may have your best interests at heart, their personal connections can cloud their judgment and potentially lead to biased advice. Neutrality ensures that the adviser’s guidance is impartial, focusing solely on the well-being of the business.
Another key criterion in selecting an adviser is to find someone without vested interests in your business. This means they should not be investors or have anything to lose or gain in your company. Advisers with a financial stake in your business may be influenced by their own interests rather than providing objective advice. An impartial adviser can give you honest and unbiased insights, helping you make informed decisions for the benefit of your business.
While industry expertise can be valuable, it’s not always a top priority when selecting an adviser for your business. Instead, place a higher emphasis on finding someone whose character and values align with yours and your cofounder’s. A shared vision and compatible values can contribute significantly to the success of your business. An adviser who understands your mission and values can provide guidance that resonates with your company’s culture and goals, making their advice all the more relevant and impactful.
Once you’ve identified a potential adviser, it’s crucial to establish clear expectations from the outset. This involves sending a formal letter of request outlining what you expect from their advisory role and what you can offer in return. Include details such as the expected time commitment, the availability of the adviser to provide references to investors, banks, suppliers, or other stakeholders, and the term of the advisory contract.
Determining how you will compensate your adviser is a critical aspect of the advisory relationship. While compensation can vary, it’s common to offer stock options as a form of payment, typically ranging from 0.05% to 2% upon the completion of the advisory term. Alternatively, you might offer free access to your product or service or a monetary payment. The key is to ensure that the compensation aligns with the value the adviser brings to your business.
Incorporate your advisers into your business’s inner circle by including them in regular updates sent to investors and other stakeholders. This not only keeps them informed about your company’s progress but also demonstrates to investors and partners that you have experienced and knowledgeable mentors guiding your business.
When meeting with your adviser, it’s essential to respect their time. Be punctual for appointments, adhere to the allotted meeting duration, and get to the point promptly. Advisers are often busy professionals, and showing respect for their time reinforces your commitment to the advisory relationship.
One of the most common frustrations for advisers is providing valuable advice that goes unheeded. To make the most of your advisory relationship, take their advice seriously. While you may not always agree with their recommendations, it’s essential to consider their input carefully. Ignoring or dismissing their advice can strain the relationship and deprive your business of valuable insights.
After receiving advice from your adviser, send a thank-you email a couple of days later. Express your gratitude for their time and share your conclusions regarding their advice. This not only shows appreciation but also keeps the lines of communication open.
As a gesture of goodwill, offer your adviser a recommendation or reference letter for their professional use on platforms like LinkedIn or in their portfolio. This can help them build their reputation and further strengthen your relationship.
Finally, leverage the name and expertise of your adviser to enhance your business’s credibility. Consider creating a board of advisers, featuring your chosen mentor alongside others. This demonstrates to investors, clients, and suppliers that you have access to a network of experienced professionals, which can significantly boost your business’s image.
In conclusion, finding the right adviser for your business, especially when you operate with a cofounder, is a strategic move that can significantly contribute to your company’s success. Look for someone neutral, without vested interests, and whose character aligns with your values. Establish clear expectations and compensation arrangements, and always respect their time and advice. By carefully selecting and effectively utilizing an adviser, you can navigate the challenges of entrepreneurship more successfully and build a stronger, more resilient business.
The Cofounder’s Hub is located in beautiful British Columbia. Our team, comprised of experts in the entrepreneurial, business and psychological fields, is working to create a space where you can come for all of your cofoundership needs.
Our goal is to help you build a successful business from start to finish. Using curated tools and resources that focus on the interpersonal relationship between cofounders and their company, we aim to teach, guide and advise you through your journey, equipping you to create the business and partnership you desire.
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