The bottom line is everyone wants the very best, but early in a startups journey the “best” might not be affordable. As full time employees. But can you experiment with the best “fractional” resources until you build greater revenue and scale prior to making full time hires? We are betting on the answer “yes”.
Let’s revisit how some of the startup worlds thinking is being shaped. Today a large number of people go through Accelerators and incubators. Many of those have mentors. Often these 3 month or so programmes do not pay these mentors but do provide a way for startups to access their networks and ask for favours for a period of time. Then the programme ends. And with it ends a sustainable engagement model for startups and those mentors. Why because the long term incentive is not there. Unless offcourse their name is on the cap table or they own some equity. We see that as a sure fire way to have long term alignment with startup founders.
We feel that model 3 probably leads to the best balance between long term incentives for both founders and advisors. The advisors get some liquid comp and may be able to enjoy a little uplift based on the fruits of their Labour and because their is equity involved the founder feels that the cash component can be lower thereby not impacting very early stage businesses too much.
There is no one size fits all but we would encourage you to consider the many variables and also the human motivations and needs of your sales, business development, partnerships and international growth and expansion advisors.
Leveraging Vestd may allow you to utilise a technology product to build confidence for your advisors that they will be rewarded fairly. Way better to focus on the real value, their skills rather than constantly being on shaky ground with respect to compensation and rewards.
Have a look at these numbers below to give you an idea of how others are compensating advisors. This is not legal or financial advice but it’s great to understand what’s happening in the market. Over the course of the following year we will be asking our community to share their own compensations stories and examples anon offcourse! And look forward to getting your feedback on how the community is helping your business grow. Now stop reading and start hiring 😀