The Guide to Advisor Shares: Finding the Right Advisors for Your Company's Success

The Guide to Advisor Shares: Finding the Right Advisors for Your Company's Success

When it comes to building a successful company, having the right advisors can make all the difference. Just like you have a vesting schedule for yourself and your employees, it's crucial to have a vesting schedule for your advisors as well. These agreements typically span over two years, with monthly vesting and no cliff.

But before promising equity to your advisors, it's worth considering if they would be willing to invest in your company instead. By investing directly, they have more skin in the game and it also sends a valuable signal to future investors. So, it's important to have a conversation with potential advisors about their willingness to invest.

When selecting advisors, it's important to approach the process as you would when choosing a co-founder. Advisors can play a critical role in your company's success, but they can also be a distraction or even a liability. So, choose your advisors wisely and ensure that they align with your vision and goals.

There are different types of advisors that you can consider. The first type is the "name advisor." These advisors bring value through association. Having a well-known and respected individual associated with your company can enhance its credibility and reputation.

The second type is the "practical advisor." These advisors serve as sounding boards and provide valuable insights and guidance. It's not uncommon for practical advisors to also invest their own money in your company during future financing rounds.

Before formalizing the advisor relationship, it's important to figure out what you want in an advisor. Determine what specific expertise they can bring to the table and what areas they can help compensate for your weaknesses. Once you have a clear understanding, put together a signed agreement that outlines the advisor's domain of expertise, what they will help you with, and the percentage of equity or other compensation they will receive.

Documentation is key when it comes to agreements involving equity. Make sure to document the agreement with your advisor and consider consulting with a lawyer to ensure that the agreement is fair and beneficial for everyone involved.

Communication is vital when working with advisors. As a founder, you need to take the lead in setting the cadence and expectations for interaction. Build agendas for meetings and establish a framework for regular communication. This ensures that both you and your advisor are on the same page and working towards the same goals.

When it comes to determining the amount of equity to grant advisors, it's helpful to look at industry standards. In 2019, advisor RSAs ranged from 0.2% to 1% of a company, while advisor NSOs ranged from 0.1% to 0.5%. The earlier an advisor joins a company, the higher the fully-diluted amount they are usually granted.

It's important to avoid a four-year vesting schedule for advisors, as the majority of their value is typically delivered upfront. Instead, consider re-evaluating the relationship after a year or two to determine if it's beneficial to continue.

Now that we've covered the guide to advisor shares, let's shift our focus to different go-to-market (GTM) motions for building successful companies. We've identified 12 different GTM motions that have been utilized by successful companies known as unicorns.

For high-intent customers actively searching for a solution, producing discoverable content is key. By providing valuable content that addresses their needs, you can position yourself as a trusted authority in your industry.

Another GTM motion that works well for high-intent customers is over-servicing one customer at a time to create super fans. By going above and beyond to meet their specific needs, you can turn them into loyal advocates for your brand.

If the offering is straightforward and the customer is not actively searching for a solution, hacking a distribution channel can be an effective GTM motion. Find unconventional ways to reach your target audience and make your offering easily accessible to them.

On the other hand, for low-intent customers who have many alternative solutions, cold outreach with a compelling hook can grab their attention. By piquing their interest and showing how your solution can solve their pain points, you can overcome their resistance to change.

Launching somewhere and generating PR can also be effective for low-intent customers. If your market is dominated by legacy players and your offering is self-serve, a well-executed launch can create buzz and attract attention.

For low-intent customers in niche markets, embedding yourself authentically in the community can be a powerful GTM motion. By demonstrating your genuine passion and involvement in the community, you can build trust and establish yourself as a go-to resource.

Building in public is another GTM motion that works well for low-intent customers. By sharing your journey, progress, and insights openly, you can attract a wide audience and generate interest in your offering.

Influencer marketing can be a game-changer for low-intent customers. By leveraging the power of influencers who align with your brand, you can reach a wider audience and gain credibility through their endorsement.

Lastly, for products with a strong social mission, full-blown PR can be a powerful GTM motion. By highlighting the impact and purpose behind your product, you can attract attention from customers who align with your mission.

To summarize, finding the right advisors and utilizing effective GTM motions are crucial for building a successful company. Here are three actionable pieces of advice:

1. Take the time to carefully select advisors who align with your vision and can compensate for your weaknesses. Formalize the relationship with a signed agreement that outlines expectations and compensation.

2. When implementing GTM motions, consider the specific needs and behaviors of your target customers. Tailor your approach to meet their unique requirements and pain points.

3. Regularly evaluate and re-evaluate your advisor relationships and GTM motions. As your company evolves, your needs may change, and it's important to adapt accordingly.

By following these tips, you can set your company up for success and maximize your chances of achieving unicorn status.