

Ask HN: Evaluate an offer for a startup advisor - hiddenemail7

My co-founders and I just began searching for $1.5-2M of funding. We met with someone who has many contacts and friends who are angels or VCs.<p>After meeting with us, he surprised us by offering to:<p>* Be an independent director of our startup. He'd advise on the shareholders' agreement, business relationships, and business model design and strategy. In return, he's asking for $1500/mo plus $1500 for each Board meeting. This would be payable if we raise money or reach a certain amount of revenue.<p>* Be a consultant for raising funds. He'd advise us on our approach and pitch, and providing introductions via his commercial and personal network. In return, he's asking for 3% of the raised funds.<p>My co-founders and I are new to raising funds, and thus don't know how to evaluate this offer.<p>Assuming that he's experienced with startups and raising capital, and has an extensive network of personal and commerical contacts, is this offer fair?
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Travis
Asking for money, rather than equity, strikes me as a large red flag. If he
doesn't believe in you enough to sign on for equity, how will he do a good job
networking and putting together deals?

Investors like to see excitement. His connections are going to know that he
doesn't believe in you long term (he's making a cash grab). How is that going
to look?

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HockeyPlayer
I'm concerned that he would rather have small amounts of cash than a small
equity stake in the company.

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subpixel
Agreed.

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hiddenemail7
That's a good point, @HockeyPlayer and @Travis. Hrmm

