The Net-Negative Startup Advisor

Sometimes, we see young startup founders approach us with a special type of advisor. I call this person the Net-Negative.

This person fits this profile:

  • About 20-30 years into the career
  • Has done a number of businesses, but none very successful
  • Often a finance person. May have made "some deals happen"
  • Not involved in any tech companies in career
  • Claims strong connections to people with money "who matter"
  • Isn't taking a salary now, but plans to join "when it's time" and get a salary. Usually, this means to "when we get an investor, I'm going to get paid."
  • Has talked the founder into a advisor percentage way too high (5% vs customary 0.25-0.5%)

    The Net-Negative is a problem for an early-stage startup. Without much startup experience, they're giving big company advice to a pre-revenue business. Their advice also optimizes for their personal win rather than the company. Bad juju all around.

    I'm still at a loss as to how to work with teams that have this person involved. So far, it seems the only solution is just to walk away.

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