A Mentor Should Be Someone Who is Not an Investor
As India’s entrepreneurial ecosystem gets built, we are seeing increased access to mentors. Organizations like The Indus Entrepreneurs, several accelerators and incubators, academic institutions, alumni networks etc., are excellent sources of mentorship.
Professionals returning from the US as well as corporate executives are joining the ecosystem. All of this will continue to build a strong mentorship network in India in 2017.
Finding Suitable Match
Mentors are like a “go to” person, a sounding board, and a patient listener, who helps you, as an entrepreneur, think through the problems. Many a time, you may know of a solution instinctively, but being too involved in the business prevents founders from identifying the best possible solution. I have personally benefitted from mentors across my entrepreneurial journey. At Portea Medical, Nandan Nilekani (Infosys cofounder and former Chairman of UIDAI), with whom we meet once a quarter has been a mentor for me and my wife Meena right from its inception three years ago.
Some of the key questions for you to consider before getting the right mentor are first, how to find the right mentor; second, at what stage you should seek a mentor; third, should there be more than one mentor; fourth, should there be the same mentor across the stages of the start-up; and fifth, should the mentor be an investor or a board member or should it be someone who has no financial interest in the company?
The best option to finding mentors is to go through your contacts or network or people in your sector who can help you identify and fill gaps. Your investors or board members or fellow entrepreneurs are another source of mentorship who will be able to guide you.
The Investor-Mentor Conundrum
Normally, a mentor should not be an investor as their advice can often get clouded based on their involvement in the company. For instance, at Marketics (marketing analytics firm), I was mentor, investor, and chairman as well. So, there were three different hats I had to wear.
For example, in negotiating a potential transaction for acquisition of the company, I had to look at it from three angles, first, what’s best for the company as its chairman; second, what’s best for the founders as their mentor; and third, what’s best for me as an investor. From the investor perspective, the company shouldn’t have been sold as it was profitable and growing 100 per cent month-on-month. However, from the mentor perspective, it was the first business for its founders.
They did not have any savings and hence this was an opportunity for them to build substantial capital to pursue their dreams for the rest of their lives. So, I advised them the latter. On the other hand, having mentors who are not investors in the company, turns mentorship into “gyan” which is too generic in determining the course of the company. In this situation, who is the mentor, matters a lot.
However, in cases of conflict of the two roles, you should stop being a mentor because as an investor, you have a fiduciary responsibility to protect and grow the value of your investment. Nonetheless, such situations are rare. Hence, having an investor as mentor is a good option as there is motivation to get deeply involved along with legitimacy to the advice being given.
Entrepreneurs too, should be sensitive to when a mentor starts acting more like an investor. In such a situation, they should ignore such mentoring advice. Inability to take feedback and criticism in the right way is often the biggest reason for failure of the mentoring process. We as entrepreneurs by nature are very persistent about our ideas and openness to other viewpoints is not our strength. If you don’t have that, you may as well not have a mentor. On the mentors’ part, they need maturity in the manner they offer feedback, which is, criticizing the process and not the founder. There must be examples and logic for entrepreneurs to accept feedback.
(This article was first published in the December issue of Entrepreneur Magazine. To subscribe, click here)