Should Startups Bring On Advisors?

Does it make sense for startups to bring onboard advisors? originally appeared on Quora: the place to gain and share knowledge, empowering people to learn from others and better understand the world. 

Answer by Kunal Lunawat, Investor and Operator, Managing Partner at Agya Ventures, on Quora: 

On advisors at large, here’s how my thoughts have evolved: there’s obviously a range of how we comp them but the most productive relationships end up being ones where:

1. Equity is linked to performance
2. Performance is clearly defined. The more precise we are the better it gets
3. For example, we helped a portfolio company bring on board a leading enterprise sales consultant as an advisor and he is helping them with their go-to-market strategy for a set number of enterprise contracts every quarter. Ideally, we want to revisit what these number of enterprise contracts are frequently.
4. Meeting cadence is flexible given these are mature/accomplished people and we want to incent them with performance and not hours put in.

On the flip side, advisory relationships don’t work when we:

1. Over index how frequently we meet (advisors are supposed to get on a monthly call etc.) and under index outcomes.
2. Get too swayed by the accomplishments of the individual and are not able to get specific commitments from them (example: strong introduction to 5 new hotels per quarter in the Bay Area operating in the hospitality space in the mid-income segment).
3. Cannot assess the prospective advisor’s motivations in doing this.

This question originally appeared on Quora – the place to gain and share knowledge, empowering people to learn from others and better understand the world.