One of the questions we get asked a lot is: how much equity should I give to advisors? We get it. In the early stages of building your startup, cash is tight. So it feels safer to pay advisors in equity. But be careful not to give away too much. Consider this scenario:  👫 Two founders start with 50% each.  🤝 Three advisors join, taking 3% each—founders now at 44% each.   📈 An accelerator claims 8%—founders down to 40%.  💼 Pre-Seed round allocates 20% to investors—founders left with 30%.  👩 An option pool for employees takes 10%—founders now hold 25%.  💰 Seed round dilutes another 20%—founders left with only 15% each. 3% of an idea may FEEL like nothing to give an advisor, but if your business is successful this figure can quickly grow: At a very modest $1M valuation, 3% = $30K At a $5M valuation 3% = $150K You can see how quickly this 'nothing' can become a lot. So here are the golden rules of giving equity to advisors: 🚀 Don't give equity away too cheaply: Work out your valuation first, then convert what feels like a reasonable fee for the advisor into a % of shares. 🚀 Set KPIs: Make sure your advisors actually deliver value! Set KPIs for your advisors (for example, making 10 investor introductions, or helping you win 2 clients) 🚀 Add vesting: Don't give shares straight away. Give share options instead, with a vesting period (either tied to the KPIs, or given out over time) Or take equity off the table completely and pay them in cash. Yes this FEELS more expensive in the short term, but could be better for you and your business in the long term. 🙌 I've witnessed many equity pitfalls! What about you? Share your questions below 👇 #fundraising #femalefounders #startuplife #entrepreneurship #equity Caroline Hughes Felicia Meyerowitz Singh Michelle Pomerantz Jessica Clucas Vicky Shepherd Kim Toker Nufar Segal Bareket Ursula Morgenstern Ranjana Bhansali Singhi Myriam Hofri Sara Seghayer Erin A.

This is excellent advice from Andrea Sommer and I see it a lot that founders give away too much equity in the beginning to 'advisors' for what? 'Strategic advice?!'. General comment don't use advisors. This seems wrong but consider that 99.9% of people offering advice have no idea what they are talking about. So its easier to not have them because the wrong advice is worse than no advice. You want advice from someone who has done what you want to do. Who is where you want to be. You definitely don't want "general strategic advice" from any of the guys below. You can use them for specific advice, but not how to grow and sell your business. Bankers Consultants Lawyers Your mum's smart friend who is a partner in Deloitte Anyone who is a "LinkedIn top voice" Any business coach who hasn't executed like you want to Any life coach Anyone who overly boasts in their LinkedIn description (because it is BS) Anyone under 40 Anyone who wasn't the CEO (i.e. not the head of growth or the head of marketing or the COO or the CTO. Someone who as CEO has had to make the hard decisions like you have to). Take advice from a founder who has raised money and grown a company a least once before. If they sold the company for what you want to exit for then great. If they went bust also great - they have seen the pitfalls, sometimes this is even better. Lastly read this: https://lnkd.in/f-Dz7dz

“I’m pre-seed. What should I be doing?” Pre-seed is possibly the toughest time. Certainly now. No-one wants to invest pre-seed because they perceive the risk is too high. Yet, potentially, it’s when the reward is greatest. So what’s pre-seed about? You’re trying to raise a fairly small amount of money, say £250-£500k, on a valuation of around £1.5-£3m, on a pre-revenue idea. Go higher and your chances fall quite dramatically (except certain sectors). Mainly it’s about: strengthening the proof you have that there's a market for your idea and people will pay, compelling storytelling, developing robust GTM, becoming an authority in your space, getting to founder-market fit, looking like a winner, relationship-building, finding potential customers, building traction, finding the best team, prototyping and feedback, experiments, creating scarcity, building waiting lists, (and I suppose all the other vanity froth like getting named on 30 under 30 lists, getting your photo taken with whatsisface, and winning awards for runner-up startup in Bridlington, etc.). And it’s about really deciding whether this is for you and ‘becoming your best’ – because much of what you raise could be friends and family money and they’re the ones you’ll regret disappointing the most. #AngelThink #angelinvesting #angelinvestors #fundraising #founders #exceptionalentrepreneur #mentor #coach Photo by Bogomil Mihaylov on Unsplash

The Power of Progress and Purpose! 💼 Greetings, LinkedIn community! It's time for a progress update on this entrepreneurial journey. Just a while back, I shared the humble beginnings of my startup history, where a ₹900 investment marked the inception. And as entering into the sixth year we announced our challenge…Today, I'm thrilled to announce that we've not only grown but flourished. In the blink of an eye in two weeks, that initial amount of ₹246 has multiplied into ₹43k! May be it will be less🌟 But, here's the essence – it's not just about the numbers, it's about the impact. This isn't borrowed ,it's purely earned, marking our first impact on the mission towards my vision. We've allocated these funds where they matter most – towards our incredible team's salaries, family fund, and ensuring the smooth operation of our office allowances. To every entrepreneur out there, remember, Your progress is not only measured in revenue but in the positive impact you make. Here's to the next chapter, the next milestone, and the relentless pursuit of our vision! Starting again this month March with ₹1k on hand, and with Ramzan ahead, we move forward with faith in the Almighty and pure intentions. This marks the beginning of our next phase. This isn't just about entrepreneurship, it's about making a difference. Here's to the next mark, the next impact. Stay tuned, and I'll update you once we reach our first mark of six figures. Together, we're turning dreams into reality. 💪 #entrepreneurshipjourney #milestonecelebration #ImpactfulGrowth #nextchapter

I discovered entrepreneurship late in life. I was 40 years old when I left the classroom and embraced the entrepreneurial journey. My first and true love is community... and I believe it is possible to create both wealth and health, belonging and embracing innovation, a world class business and shared prosperity. To make this real, we need new business models so that when Businesses Win, the Community Wins. For me, it starts with SPCC.1 and the creation of the ESO Foundation to grow the Capital in the Community Ecosystem. Learn more here: https://www.spcc.one/ 4 years ago I launched ESO Ventures with Ben Wanzo and Martha Hernández, SHRM-SCP, and I am incredibly grateful to my business partners, our team, our network of Black and Brown entrepreneurs and our collaborators for their faith and commitment to making entrepreneurship accessible and worthwhile in every community. I remain on the Board of Directors, and am committed to ESO’s long term success. It has been an incredible experience growing a company from an idea and a $5k check on June 1, 2020 to incubating 400 businesses, standing up a $12M debt investment fund, building multi-year partnerships with the BACCC, GoBiz, Kaiser, JPMC and most importantly the State of CA to build an affordable onramp to business ownership. Starting businesses, and facing health challenges in mid-life you learn something. For me, it’s that… ➡ I am a Founder, not an Operator… I love Blue Ocean… ➡ Life is Short… Find the biggest dream you can imagine… your true assignment… and do that always… the people and the resources will come… ➡ The journey is the destination! This is the first time I am starting a business with the complete picture of what the company will look and feel like when it is finally done. It is an ecosystem, a platform cooperative, that will allow all of the smallest companies of the world to compete for contracts and growth capital against the largest companies of the world. It is a virtuous cycle that will generate and recycle capital in the community. I am glad I have my wife’s support. Thank you Rita Mathew! And I hope to see you around! #communitycorporations #buildwhereyouare #startupecosystem #entrepreneurship #smallbusinesses #founders

Becoming comfortable with rejection is a vital aspect of personal growth & resilience. It transforms setbacks into learning moments and not every opportunity or relationship is meant for us, which is okay. Embracing rejection is about finding strength in vulnerability & seeing the growth opportunity in every "no." #personaldevelopment #growth #journey

Founders, let’s talk about something that comes up a lot: dilution and fundraising strategy. It’s easy to get fixated on minimizing dilution at all costs, but as I shared recently at a panel at McMaster University, this approach can actually backfire. Why? Because it tends to raise red flags with investors. Here’s the thing: the best founders I’ve backed don’t sweat every percentage point. They focus on getting the deal done and then dive back into building the business. Sure, there are some general rules to keep in mind, a top one being to aim to avoid selling more than 20-25% of your company in any single round so you maintain a healthy cap table as you move through funding stages. But don't let dilution become a backseat driver in your fundraising journey. If getting your business off the ground requires you to raise an outsized amount early on, go for it in spite of the dilution (Just make sure, of course, you’ve got the metrics to back up that high valuation—think solid revenues, a strong customer base, or other compelling proof points). Remember, the real key is to keep your eye on the prize: building real value in your business. The founders who get stuck on dilution often signal that they’re already anticipating trust issues with investors. That’s a non-starter for a productive partnership. Stay focused on what matters: executing your vision. The rest, including dilution, will sort itself out along the way. #fundraising #entrepreneurship #venturecapital

Day 124 of 366: The Emotional Rollercoaster of Raising Capital 🚀💼 Today marked a significant step in our journey with RUN WITH as we prepared to engage with investors. We've finalized our pitch deck and sent it off for review, sparking a crucial internal discussion: Who will lead the charge in pitching to investors? As this conversation unfolded, I experienced an unexpected emotional response—my chest tightened, and I felt an overwhelming desire to retreat. This reaction wasn't due to a fear of public speaking or pitching; on the contrary, I thrived in this role during my time at Tribu, relishing the interaction and learning opportunities it provided. Reflecting on this moment, I realized that my anxiety stemmed from the recognition of the immense time commitment required to successfully raise capital. It's a full-time endeavor that demands every ounce of one’s energy and focus. Currently, being deeply involved in four different businesses, I know that taking on the responsibility of fundraising for RUN WITH would be more than challenging—it would be nearly impossible without sacrificing the attention necessary for my other ventures. The Reality of Raising Capital: - All-Consuming Effort: Fundraising is not just a part-time job; it requires complete dedication and often leads to personal sacrifices. - Emotional Investment: The process can be emotionally draining, filled with highs and lows that test even the most seasoned entrepreneurs. - Strategic Decisions: Understanding one's limitations and capacities is crucial in deciding how to approach fundraising without jeopardizing other business commitments. Today’s experience was a stark reminder of the complexities and emotional depth involved in raising capital. It reinforced the importance of clear role delineation and recognizing when to delegate tasks to others who can dedicate the necessary time and energy. Raising capital is indeed not for the faint-hearted, and today was a profound testament to the courage and resolve required to navigate these waters. #StartupFunding #Entrepreneurship #BusinessChallenges #InvestorPitch #RUNWITH #Day124of366

There are so many inconvenient truths standing in the way of #founder success. I like Daniel Priestley’s idea of #radicalempathy for businesspeople – the idea that you can win business with a deep understanding of what it’s like for your prospects not to know something (that you can help with). As an aside, I do like his continual flourish of new ideas – wish I was on his creative team! The ‘radical empathy’ idea is an interesting idea if you are trying to get to #productmarketfit and #scale a business. OK, founders – he sets us a simple exercise to develop this – try putting yourself in the shoes of the prospect you're targeting and write a list of the 99 things or problems that you think they face. Give yourself 3 minutes. How far did you get? I’ve tried this by putting myself into the shoes of a #fundraisingfounder thinking about investors to do this. I’ve listed below the first 10 that come to mind: 👉 How can I give myself the best chance of raising money? (Here you’ll have to develop your own empathy – developing your understanding of how #angelinvestors themselves think – insights available in my book #AngelThink – on Amazon) 👉 How do I find investors that’ll be interested? 👉 Have I proved enough that a market exists? What proof will investors expect? 👉 Is my vision going to impress investors, particularly the ROI I want it to deliver? 👉 How do I set a fair valuation, one that give investors a reasonable amount and doesn’t dilute me too much? 👉 How will I impress investors that I can lead a team if I have no management experience? 👉 Should I consider an accelerator, and what criteria should I use to choose one? 👉 Is my idea ‘hot’? Is it going to excite investors enough? What do those ideas look like? 👉 Am I personally investable? What do I need to do to show that? 👉 Where can I get the best help? Good mentors and coaches?   It’s a tough time for #founders trying to grow and #scale a business but Priestley argues that radical empathy helps you develop your product, your marketing and sales, and achieve more connections.   I’ve tried to show it in action with #fundraising founders. With a bit more time and space I could easily double the list.   What do you think? How deeply do you understand what an #angelinvestor is likely to need?   #AngelThink #raising #investment #pitchdeck #SEIS #EIS #valuation