The Key to Building a Successful Company: Advisor Shares and Community Engagement

The Key to Building a Successful Company: Advisor Shares and Community Engagement

Introduction:
Building a successful company requires careful consideration of various factors, including the allocation of equity to advisors and the cultivation of a strong community. In this article, we will explore the importance of advisor shares and community engagement by combining insights from two different sources: "The guide to advisor shares - Carta" and "Strava success: why the app adds a million new users every 40 days." By examining common points and incorporating unique ideas, we will provide actionable advice for entrepreneurs looking to enhance their company's growth and success.

The Benefits of Advisor Shares:
Just like vesting schedules for employees, having a vesting schedule for advisors is crucial. These agreements typically span two years, with monthly vesting and no cliff. It is important to consider whether potential advisors would be willing to invest in your company instead of taking equity. By investing directly, advisors have more skin in the game and can send a valuable signal to future investors. When selecting advisors, it is essential to approach the process as you would when picking a co-founder. Advisors can either be critical to your success or become a distraction, wasting precious time and potentially becoming a liability.

Different Types of Advisors:
There are two primary types of advisors: those who provide value through association and those who offer practical advice and act as sounding boards. While the former benefits your company through the advisor's reputation and network, the latter provides guidance and support in areas where you may have weaknesses. It is not uncommon for advisors to express interest in investing directly in the company or participating in future financing rounds. When establishing a formal relationship with an advisor, it is crucial to outline their domain of expertise, the areas they will help with, and the percentage of equity or other compensation they will receive. Documenting the agreement is essential, especially when equity is involved, and seeking legal advice is highly recommended.

The Power of Community Engagement:
Strava, a popular fitness app, has achieved remarkable success by prioritizing community engagement. By focusing on their original mission and creating a simple, user-friendly app, they have built a strong and loyal community of athletes. The app's tagline, "If it's not on Strava, it didn't happen," highlights the importance of public proof of work and the sense of achievement that comes with tracking progress and setting records. Founders and entrepreneurs face the challenge of turning great ideas into long-lasting global companies. Strava's approach of fostering community and becoming the home for active lifestyles has been instrumental in their growth.

Actionable Advice:

1. Carefully select advisors who align with your company's vision and have expertise in areas where you need support. Consider their willingness to invest directly in your company, as it demonstrates commitment and can attract future investors.
2. Establish clear agreements with advisors, outlining their responsibilities, compensation, and any equity involved. Document these agreements and seek legal advice to ensure fairness and protection for all parties involved.
3. Embrace community engagement as a key driver of success. Create a platform or space where users can actively participate, share their achievements, and build a sense of belonging. Encourage public proof of work and provide opportunities for users to track progress and set records.

Conclusion:
Building a successful company requires strategic decision-making regarding advisor shares and community engagement. By understanding the value of advisor shares and selecting advisors wisely, entrepreneurs can leverage their expertise and networks to propel their company forward. Additionally, prioritizing community engagement, as exemplified by Strava's success, fosters a sense of belonging, accountability, and achievement. By implementing actionable advice such as careful advisor selection, clear agreements, and active community engagement, entrepreneurs can enhance their company's growth and long-term success.