Finding professional mentors is not a concept unique to entrepreneurship, but it is particularly important for startup founders, since they are constantly dealing with so much uncertainty. Having seasoned hands to guide critical decisions is at least reassuring, and can sometimes be the difference between success and failure. Finding mentors sounds simple enough, but a lot of founders are unsure how to develop these relationships, whether or not they should give mentors equity, how many they should have, and which industry professionals they should approach. Fortunately, a lot of other entrepreneurs have been through this process and have developed a collective wisdom that can help you look for your perfect mix of mentors.
Who to Approach
A lot of founders assume that their mentors should be as high profile as possible. While high-level endorsements do greatly improve your credibility (e.g. Sir Richard Branson backed the startup TransferWise, so they put his picture and endorsement on their homepage), shooting for celebrities or industry titans isn’t always the best approach.
First of all, it will be difficult to connect with these people and convince them to listen to you for five minutes, let alone be an ongoing mentor. Secondly, even if you secure them as a mentor, celebrity entrepreneurs and CEOs inherently do not have a lot of time, so you may not get many (or any) chances to actually dig into your startup’s issues with them.
Top dogs can also lose touch with the trenches. For example, during his MBA studies, a friend of mine attended a lecture by Donald Trump. During the Q&A, one student asked what a small company could do to raise barriers to entry in order to deter new entrant competitors. Trump recommended acquiring all competitors. Potentially sound advice for gigantic companies, but impractical for the little guy.
Instead of the celebrities, it can be more practical to look for successful people that are 2-5 years ahead of you in the same vertical of the same industry. They will more easily remember what you are going through, will have likely faced some of the same challenges, and are much more likely to have time to speak with you in depth.
You Don’t Ask, You Develop
Ok, you’ve found the Who, now how do you make someone a mentor? Unfortunately, it’s not as simple as sending an email that says “Hey, will you be my mentor?” The relationship should develop more organically. Get a warm introduction to your potential mentor and see if they are willing to talk you through a challenge. If they are helpful, stay in touch, keep them updated on your company (without spamming them), and see if you can help them with anything. Once another challenge arises, they will probably be open to helping out again. Some mentors will continue supporting you out of pure kindness, but most will fade away unless you give them an incentive to stick around, which is why it is important to consider giving mentors a little equity.
Retaining a Mentor
It is not an official rule, but many in the startup world agree with VC and former founder Jason Lemkin’s two and a half concept: “after 2.5 times they help...you need to “pay” or they go away.” That is, you can get free advice from solid mentors two or three times before they stop dishing out free help. After that, if you want to retain them, you should offer a small percentage. There are no official rules for how much equity to offer, but the Founder Institute did come up with a mentor contract template, which includes the table below. If you’re going to give a mentor equity, definitely create a contract that lays out expectations and vests their shares - just like you would do for a new founder.
Founder Institute Mentor Equity Suggestions
____ ____ (0.25%)
____ ____ (0.20%)
____ ____ (0.15%)
____ ____ (0.50%)
____ ____ (0.40%)
____ ____ (0.30%)
____ ____ (1.00%)
____ ____ (0.80%)
____ ____ (0.60%)
The important thing to remember is that your mentors should have some continued incentive and motivation to help you. Paying cash is more appropriate for a consultant, and no matter how charming you are, you shouldn’t realistically expect anyone to stick around forever for free.
Get a Mix of Mentors
You will likely want and need several mentors, who can advise you on different aspects of your business and connect you to the right people in your space. According to Inc.com, many startups benefit from having about four mentors that each specialize in one of the following: Sales, Operations, Business Development, and Entrepreneurship. For startups in the chemical space, the optimal mix is probably more like: Product Development, Sales and Marketing, Intellectual Property, and Operations. That specific mix of four roles isn’t set in stone, but it should help you think about which parts of your business will likely need the most help going forward.
Mentors will likely become a critical part of helping your startup grow and succeed. While it is tempting to reach for the titans of your vertical, it is often more useful to find entrepreneurs that are 2-5 years ahead of you on the same path - they will have more time and more relevant advice for you. Once you identify the right people, you should develop a relationship with them and see if they are a good fit as a mentor. If they are, you will likely need to offer a little equity (about 0.1% - 2%) to keep them around. Ideally, in time, you will have a mix of mentors that can advise and accelerate each aspect of your business. Successful businesses are built on strong teams, and mentors are part of that team. Choose them wisely.
Jack Fischl is a co-founder at Keteka.com - a website that connects travelers with authentic tours and activities in Latin America and allows them to book their experiences online.