Wednesday, April 30, 2008

I Cut The Wrong Deal With An Advisor - Ask the VC

This is a great post from Brad and Jason over at "Ask the VC" (one of the blogs I like). Advisors can be a useful member of the team if they can help you structure your business plan and help prepare your company to be attractive to investors. However, remember, we are investing in YOU, not your advisor. So, outsourcing your fund-raising to an advisor is a non-starter strategy. Advisors should be just that, your advisor, the person next to you willing to give you support.

Advisors do have a role - some companies would never have received funding without the advisor's help. However, an advisor can also poison a deal by demanding unattractive terms. They need to find the sweet spot in the middle to reach the most success.

Unfortunately, the advisor in the post below isn't in the sweet spot:

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