by Svetlana Kamyshanskaya, Founder of Primum Law Group
Launching a startup can be a heavy undertaking, even for the most savvy businessperson. There are many factors to consider, money is being spent left and right, and there may be several people bringing opinions and suggestions to the table at any given time.
As you bring your idea to fruition, having the right people at that table can mean the difference between success and failure. Having solid advisors in place can benefit your burgeoning venture’s current and future health.
Founders and Expertise
Startup founders can be some of the most talented innovators in the world and still not have the full range of knowledge and expertise necessary to bring a business through a successful launch. Often, founders with technical or creative backgrounds will bring on co-founders more grounded in business to manage operations and growth, but even that does not mean that founders can navigate the process without involving the experts and advisors.
The role of advisors is to bridge the gaps between knowledge bases. In most cases, to make a business successful, one must have a solid vision and concept, understand business structure, legal matters, and organizational design, grasp the product development process, and be comfortable with marketing, sales, scaling, and distribution.There are some cases where founders or co-founders could be well-versed in all of those areas, but advisors can cover the gaps they may have in expertise.
Advisors can be the cornerstone of your operations. They can add clout to your startup team, and their connections and networking capabilities can help grow your young business by leaps and bounds. In addition, assembling a team of competent advisors can be the first step in gaining trust with investors and strategic partners.
The Job of the Startup Advisor
A startup should choose advisors based on their niche knowledge, which means assembling a multifaceted team of experts. Advisors typically carry one or more particular deliverables, ranging from wealth in the form of investors, specific work skills, or mentorship capabilities. If the people who possess this range of skills are not interested in being members of a Board of Directors due to the time commitment and liabilities associated, or are not quite the right fit for a board, they may be better suited for a role as an advisor.
The main priority for the majority of startups is raising capital and growth. A good team of advisors makes the startup more attractive for investors, as investors understand the probability of success for these startups is higher. Advisors encourage growth and help founders by saving them time, helping them avoid mistakes, providing insights, and sometimes even bringing customers or clients to the startup. Unlike regular consultants, advisors are typically compensated through equity in the company or terms agreed upon as reimbursement for their time and effort in advising the company.
Different advisors fill different roles depending on what is needed by a founder. For example, in a startup that is tech-based, advisors with a wide range of technical expertise are bound to be required. In startups that focus on marketing skills or a physical product, advisors with expert knowledge in those areas would be more advantageous. The group of advisors assembled can be the first point of contact for a startup founder who has questions or needs direction.
Legal advisors play a pivotal role within startups. More than just a lawyer, legal advisors can help startups foresee potential issues and advise on how to successfully avoid them. There are a myriad of legal issues woven within the foundation of a company — from incorporation to tax navigation, to navigating government entities. Solid, talented legal advisors can act as risk managers, help startups with licensing needs, and lead them through regulatory hurdles.
Avoiding Mistakes and Making Connections
Having advisors in place can help startup founders avoid costly mistakes that could potentially spell ruin for their venture. From the formation of the initial concept, advisors can help steer founders from entering the wrong markets, picking the wrong investors, making mistakes in presentation, or making mistakes that could lead to litigation.
Through valuable connections, knowledgeable advisors can help create a foundation of support for a new business, opening doors for potential partnerships or talented hires. When an advisor is well-known in a particular niche industry, their name can help get one’s foot in the door and assist in fostering brand recognition.
When and How
When to bring on advisors is a question that many startup founders may have. Through the formation of their initial idea, there may have been some advisors who were naturally with them on the ground floor. Conversely, advisors may be something that founders have to seek out actively.
When seeking talented advisors, founders need to consider their product or service niche, initial strategic plan, target market, and current challenges. Analyzing these points will help guide founders to the right advisors. Speaking with people they trust, board members, co-founders, and employees that have been brought in early can help open up lines of communication, leading founders to the best advisors for the job at hand.
Advisors can be hired right at the beginning of a startup’s rise, as the startup scales, or when (and if) the startup finds itself at a crossroads where they need to ramp up sales or solve a problem hindering growth. Advisors can come into play at many stops along the startup journey. A good advisor offers advice, insight, and guidance. A great advisor provides the same, but additionally gives founders the room to apply the knowledge gained and grow from it.
Founders should choose their advisors carefully, taking steps to avoid any conflicts of interest within their industry or taking on advisors with checkered pasts. Advisors should be vetted just as potential employees are through interviews and background checks.
As one’s business scales and evolves, their needs regarding advisors may change, as well. Reconsidering what is needed in terms of advisory is a natural part of business growth, and different advisors may be brought on to fill various roles as the business grows.
Putting the right people in place is a large part of startup success. The right advisory team can be a boon for your startup, taking you from idea to execution and staying with you as you scale and solidify your place as a market leader.
Svetlana Kamyshanskaya, founder of Primum Law Group, is more than an international business lawyer, she is a global citizen with the legal, operational, and project management know-how to chart a successful course for expanding international tech companies and startups.