How to Score an Advisor When Your Startup Has No Money
"If only I had an investor who would come on-board and throw in some money, I'd be able to do A, B, C and D. Then we'd really be off to the races."
Have you thought or said something like this before?
I have. And it's frustrating because you end up spending so much of your time and energy chasing after the investor as a result. And the next one. And the next one. Oops, that one was close, lost him at the last moment. And so the story goes.
Good news. You can eliminate at least half of this pain or more starting today.
First, though, we need to touch on the genome of what most early-stage investors are looking for in a startup:
- 50 percent strong team
- 30 percent week-over-week traction
- 20 percent revenue
The best way to strengthen these criteria early-on, especially when you're bootstrapping and have little to no funding, is to reach out to your personal network.
Before choosing an advisor, begin thinking about the weak areas for your startup. These days with services like oDesk and Elance anyone can pretty much find a way to build something. So while you think your weak spot might be on the tech-side of things, it's probably not, or it's only the tip of the iceberg. Tons of people are building things right now, but hardly anyone is building something novel and uncomplicated -- something that works and becomes integral to a target demographic.
Here are some types of advisors to focus on:
- A solid product manager in your niche
- Someone with lots of proven online marketing and user acquisition experience
- A well-connected PR person -- especially old-school offline PR
- A finance person with tons of corporate development experience
Here's why these types of people are super beneficial to you:
- The product manager knows how to build things that solve the correct problem.
- An online marketer knows how to bring people to your solution.
- A PR person can create great synergy by connecting you to brands they work with that have way more traction than you. Osmosis.
- Finance corporate development person -- a money person who knows investors
Ask these potential advisors for references from people they've previously worked with and follow-up on them. Let them know early-on that you want to increase their role from advisor to some type of paid role at your company. And here's a word to the wise -- if you have no intention of paying this person at some point for the value you think they can add to your startup, that says a lot about how valuable you think they really are. The best kind of advisor is the type of advisor who is interested in becoming part of your dedicated team at some point.
You will never find more of a selfless person at your startup beyond your advisor.
And what about the money? After bringing these people on, you still aren't going to have additional dollars in your startup's pocket, but you'll be well-on-your-way to a solid team that's dedicated to gaining your product traction, which is about 80 percent of what most early-stage investors look for in the first place.
Related: Why Now Is the Time to Seek Startup Funding
Garland William Binns III is a former product manager at Cisco with other past experience working in and around globally distributed teams at Accenture and other technology firms. He has founded and exited multiple startups and is currently working with high technology surrounding the use of Bitcoin and other digital currencies.