Notes from SXSW: Looking for Advisors?
Plenty of start-ups would kill to have someone like Gary Vaynerchuk as an advisor.
But access to a high-profile advisor and investor like Vaynerchuk is tough to get. So without any stellar introductions, what's the best way to approach an advisor?
"If you want it, you gotta try everything," Vaynerchuk said recently on a panel discussion at the annual South by Southwest Interactive conference. "If you're standing outside my apartment in New York City with a cup of coffee…I'd think wow, thats a badass hustle."
The panel was moderated by Chase Jarvis, a photographer and film director, and included Vaynerchuk, Tim Ferriss, author of The 4-Hour Workweek and founder of BrainQUICKEN, on online-based sports nutrition company, as well as J.R. Johson, the founder of Trippy, an online travel site, and Tony Conrad, a serial entrepreneur, and most recently the CEO and co-founder of About.me, which was acquired by Aol in December 2010. Conrad is also a founding partner at True Ventures.
Here's an edited version of the advice these four panelists offered to start-ups.
What's the point of having celebrity advisors in the first place?
Tony Conrad: There were a group of people that wanted to put money About.me. But I didn't want to raise any money. Getting advisors was a mechanism for me to get people involved in the company by giving them shares instead of taking their money. In the beginning we had four employees and 26 advisors. It was about getting a good crew together—and when someone like Kevin Rose (the serial entrepreneur and founder of Digg) tweets out that he set up an About.me page, it has an impact.
What's the best way to approach an advisor?
Gary Vaynerchuk: Be as squeaky as you can F-ing be. It's shocking what I've done after the fourth or fifth ask. If you want it, you gotta try everything. If you're standing outside my apartment in New York City with a cup of coffee…I'd think wow, thats a badass hustle.
J.R. Johnson: Also, get 100 if you can get a 100. The more the better. Get a team around it. Once you can get one person engaged and involved, it becomes easier to get another. And I pitched them like I would pitch an investor. You have to be patient. Eventually, we got guys like Anthony Bourdain and Andrew Zimmern—but it took months. Everyone is tough to get in front of. It's more of an art than science. When I finally got there, I didn't want to screw it up.
Conrad: Entrepreneurship has become a vocation. It's just like choosing to be a doctor or lawyer. And if you take that approach, you can slow the eff down. Just be cool. Remind [a potential advisor] that you met him and eventually you get to the point where you're just hanging out. I don't want to pounce on anyone. I waited for the right time. This is how it happened with one of my advisors. I got a chance to tell him about my product and why it was real to me. Then I asked him if this is something you'd be interested. He said, "I was waiting for you to ask."
Tim Ferriss: If you have numbers or traction or other people involved, you have to use those to attract advisors. Also, let's say I'm running in an airport. I get approached and they say: "I know you're busy. Here's my card. My company is growing 40 percent." That can work.
How do you choose the right advisor?
Ferriss: You shouldn't look for the biggest name, you should look for the right fit. You need to ask yourself where is my start-up going to be on their list of their priorities. It doesn't matter who you have if they don't bring much to the table. A few tweets are not going to fix a broken business model. They're not going to make or break your company.
How much equity should an advisor get?
Ferriss: Think about advisors the same way you think about your VPs. I think 0.1 percent to 0.25 percent is fair. But it depends. It can be a lot more if they're worth it.
Conrad: Llike Kim Kardashian with ShoeDazzle. But she's a brand. In general, keep the equity as low as possible. They're doing it for money, sure, but they're also doing it because it's fun and because they like the people. We give less than a tenth of a point. Keep it common sense. You can't give away your whole company away.
At what stage in your company should you be looking for advisors?
Vaynerchuk: The problem is that everyone thinks they're entrepreneur. They saw a movie and think they want to wear sandals and a hoodie to work. I've seen so many effing bad entrepreneurs. When pitching, I'm not interested in an idea. So you have an "idea."OK. What do you want, a cookie? I've had 97 ideas since I've been sitting here. This idea pitch…it's a waste of time. Show me you've actually done something.