Does this make sense?
Stowe Boyd suggests that as the need for investment in start-ups diminishes (he’s talking high tech) the need for advice remains high.
He suggests offering equity in a start-up in exchange for and advisory role.
As an advisor, I think it’s a great idea. What do you entrepreneurs think?
Subscribe to this site's RSS feed.
4 Comments
Dharmesh Shah
Though this is a good idea (in concept), the execution can get a little tricky sometimes.
Most very early stage startups (who can likely use advice the most) don’t have a structure in place to allocate equity.
An additional challenge is figuring out how to value your time/contribution and value the company (to determine how much equity should be allocated).
One could parallel the concept of an advisory board member (who usually gets about a quarter percent or so), but this seems a little arbitrary.
03 Mar 2006 04:03 pm
John Seiffer
Good points – the devil is in the details – but if they can be worked out, I don’t see why it shouldn’t be a workable solution in some situations.
03 Mar 2006 05:03 pm
Tim Weiler
It seems I’m always bouncing ideas off of myself.
“Hmmm, should I ask for an email address when users sign up for an account, even though it’s not needed for the product to work?”
“Should I concentrate on targeting small businesses or the average consumer?”
It would be nice to throw these types of questions out to get second opinions. What I really need is a sounding board to help me think through my needs and goals.
04 Mar 2006 04:03 pm
John Seiffer
A sounding board is nice. But without the right context many opinions from many different people can become noise. In my experience one context where that doesn’t happen are in a coaching situation – where someone is familiar with your goals, your style and your history. They become a sounding board and usually focus on improving your process.
Another context is in a consulting or mentoring situation where someone has expertise about your market, or your business. They then become a sounding board that helps you gain the benefits of their experience.
04 Mar 2006 05:03 pm
You must be logged in to post a comment.