How to Choose Startup Advisors (and Avoid Equity-Hungry Charlatans)

Most people are happy to have opinions on topics they know nothing about — and startup advising is no exception. Dozens of self-described "expert startup advisers" will approach you in the early stages, and the majority will be a time sink, a distraction, or a quiet drain on your cap table. The goal of this guide is to help you find the rare ones who deliver real value and filter out everyone else fast.

What a Good Advisor Actually Does

The core job is simple: keep you from making avoidable mistakes by lending their experience, knowledge, and network.

But "advisor" is not a single job description. Your specific gaps determine what kind of advisor you need. You might be a domain expert who lacks an industry network. You might be a strong operator who needs technical credibility in a new vertical. You might be a hardware founder building your first SaaS product. Whatever the gap, the only way an advisory relationship works is if both parties understand — upfront — exactly what is expected.

Some advisors come with a secondary benefit: reputation. A well-known name on your advisory board can signal credibility to investors and partners. Others are influencers who generate attention for the companies they touch. Many founders chase these profiles first. Treat them as a marketing play, not a core advisory relationship — those engagements tend to produce the least value.

When scoping what you need, think across three dimensions:

• Knowledge — Is there a domain you'll need deep expertise in for the next two or more years? Short-term needs belong to consultants, not advisors
• Connections — Do you need specific introductions? Assess how well the person actually knows the players, not just whether they're connected on LinkedIn
• Company building — Has this person built a company similar to yours in sector, revenue model, and exit type?

Think of it like hiring a part-time co-founder who drops in periodically rather than builds with you daily. The bar should be nearly as high.

The One Rule That Filters Out Most Bad Advisors

If they ask to be an advisor, run away.

This is the single most reliable signal. Anyone genuinely valuable enough to help your company will not be cold-pitching their advisory services. The people who do are usually optimizing for cap table entries, not outcomes.

Beyond that red flag, great advisors share five traits:

• Problem-solving — Domain expertise is only useful if it can be applied to novel situations. Startups are a continuous series of new problems
• Communication — The best expert in your space is useless if they can't explain their knowledge clearly to non-experts
• Enthusiasm — They need to genuinely love your idea. An advisor who is lukewarm will never go beyond the minimum
• Availability — Someone who can only spare 15 minutes every other month is not actually advising you
• Personality fit — Advisors work best when the relationship resembles friendship, not a vendor contract. Low ego is the trait to look for

A Framework for Vetting Advisors Before You Commit Equity

The most common mistake founders make is formalizing an advisory relationship before they have any proof of value. The better approach is to test first, contract later.

1. Be patient

Building a full advisory board in a month is a red flag in itself. Find advisors one at a time. Your needs will also change as the company matures, so leave room for advisors who match future stages, not just today's problems.

2. Identify candidates based on your specific gaps

Start with mutual connections for warm introductions. Cold outreach can also work — what matters is that you have a clear reason for approaching this specific person. At this stage you are identifying potential fits, not making offers.

3. Don't mention "advisor" in the first conversation

Reach out with a genuine ask: you want to discuss your idea and get their perspective. Do not raise the topic of an advisory role. Your only goal in this conversation is to measure their interest in your problem space and their willingness to engage. If they are truly expert and care about the domain, the conversation should flow naturally and they should surface useful information without being prompted.

4. Stay in touch informally

If the first conversation goes well, ask if you can reach out occasionally with questions. Anyone who genuinely wants to help — and has the low-ego profile you're looking for — will say yes. Check in one to two times per month with a specific, substantive question. Do this for three to five months.

5. Watch for the equity red flag

If someone immediately asks for equity just to stay in touch informally, that is a strong signal they are more interested in accumulating positions than in helping you build. Move on. There is no shortage of potential advisors, and the best ones engage because they love the idea.

6. Formalize the relationship only after they've proven value

Once someone has demonstrated genuine helpfulness over several months, it is time to bring them on with a proper agreement. Use the FAST Agreement — it is the standard template for advisor equity arrangements and covers the key terms cleanly.

Advisor Compensation: What the Data Shows

Advisor equity typically falls between 0.1% and 0.6%, depending on how much value you expect the relationship to generate. Carta data shows this range has remained fairly consistent over several years, though it has drifted slightly lower. One important variable: as your company matures and the equity is worth more in expected value, the grant size shrinks.

Some advisors prefer cash over equity. That is a personal negotiation between you and them — there is no universal right answer.

The advantage of the vetting framework above is that by the time you formalize the relationship, the advisor has already demonstrated their value. That reduces the need for aggressive legal protections like long cliffs, because the trust is already established.

Further Reading

For more on building and managing an advisory board, these are worth your time:

• Building your startup advisory board — SVB's practical overview
• How to find great advisors for your startup (and avoid the shit ones) — Matt Munson on Medium
• 7 tactics to get the most out of your startup's advisors — First Round's The Review

Case Study: Raising in a Hard Category

Vlada Lotkina, founder of ClassTag, scaled her platform to 5 million teachers and parents, raised $12 million in venture capital — including from investors who initially passed — and successfully exited the company. Her experience navigating the education category, which VCs have historically been skeptical of, is a useful reference for any founder raising in a space where investor appetite is thin and the user acquisition story is non-obvious.

Sponsor Resources

Two vetted service providers used by founders in this community:

• Startup legal services — Bowery Legal
• Startup-friendly accounting — Chelsea Capital

Written by Jason Kirby.