How Startups Can Find and Work with the Right Advisors for Success

There comes a time in every ambitious startup’s journey when the expertise and knowledge within the founding team no longer suffice. This realization may stem from the founders themselves, who recognize their gaps and seek external guidance, or from early investors who see potential issues and wish to help the company succeed. Either way, it's clear: the startup needs advisors. So, how do founders find the right ones, and how can angel investors support this process?

Step 1: Finding the Right Advisors

The Hard Way

For a startup to succeed, the founders must have a solid understanding of the problem they are solving. They need to know their industry, its challenges, and the existing solutions. While founders don’t necessarily need decades of experience, having a grasp of the industry dynamics and the competition is essential. This knowledge doesn’t come easily and requires time and effort—effort that’s often difficult to balance with running a startup.

As founders acquire this knowledge, they also begin to build their networks. For experienced founders, the first step in finding advisors often involves reaching out to people they already know. However, for those with limited connections, cold contacting may be the answer. Reaching out to the right individuals requires understanding the industry and identifying potential experts to connect with. It also takes persistence and confidence to make that first connection, as well as a compelling message or elevator pitch. It’s hard work, but it’s part of the entrepreneurial journey.

The Shortcut Way

Incubators and accelerators are designed to help startups accelerate their growth by providing access to networks of mentors and experts. These programs can be a fast track to finding advisors, as they have already done much of the legwork. With a curated list of mentors who are willing to share their expertise, these programs provide a shortcut to access the right knowledge and connections. While incubators and accelerators typically focus on specific stages of a startup’s development or certain industries, they are an efficient way for founders to meet experienced advisors. However, these programs often come at a cost, usually in the form of equity.

The Smart Way

Angel investors are often the best source of support for early-stage startups. Beyond funding, angels bring valuable expertise and networks to the table. A smart founder will take advantage of the knowledge and connections their investors offer, either by seeking direct advice or leveraging the investor’s network to find the right mentors. Since angel investors have a financial stake in the startup’s success, they are highly motivated to help the founders by connecting them with advisors who can provide the necessary guidance and resources.

Step 2: Choosing the Right Advisor

Once potential advisors have been identified, the next step is selecting the right ones. Not all advice is equally valuable, and it’s crucial for founders to find advisors who can meet their needs at their specific stage of growth. Two important considerations when choosing an advisor are relevance and balance.

Relevance

The best advisors are often those who have recently navigated the same challenges the startup is facing. If a company is still finding its product-market fit, advice from a seasoned CEO of a major corporation may be inspiring, but it is unlikely to be practical or relevant. Instead, founders should look for advisors who have recently built businesses at a similar stage—those who understand the struggles of early-stage growth and can offer actionable advice. The closer the advisor’s experience is to the startup’s current challenges, the more valuable their insights will be.

Balance

When working with advisors, it’s important to maintain a balance in the relationship. The advisor should not feel like they are giving too much without proper compensation, and the startup should ensure that it doesn’t give away too much equity without receiving significant value in return. Many advisors add the most value in short bursts—offering focused guidance over a limited period of time. In these cases, paying an advisor for their time, rather than offering equity, is often the best approach. Equity compensation is appropriate for long-term relationships, but it should be kept modest—around 0.25% to 1%.

Step 3: Working Together

Finding the right advisor is just the first step. The real challenge lies in effectively utilizing their guidance. Founders must be "coachable," meaning they need to listen to and understand the advice they receive, then apply it to their company’s specific context. However, not all advice is actionable, and founders need to critically evaluate the input they receive.

When working with multiple advisors, it’s common to receive conflicting advice. In such cases, it’s up to the founder to analyze and synthesize the advice, extracting the most useful insights from each advisor’s perspective. The best advisors understand that they can’t provide all the answers but offer valuable input based on their own experiences. The key is to take what works, incorporate it into the business, and adjust the strategy as necessary.

One important role that angel investors can play is to support the founders by helping them navigate the advisory process. Investors should not pressure founders into making decisions solely based on expert opinions but should instead trust the founders to use their own judgment. While advice from experts can be invaluable, it should always be viewed critically, especially when it conflicts with the founder’s deeper understanding of their business. Investors can assist by connecting founders with knowledgeable advisors and providing guidance without pushing for immediate action based on external opinions.