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How Advisors (Sometimes) Ruin Startups

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    NEWSLETTERS

    Micah Baldwin, is the CEO and chief community caretaker of a company that has no Chicago connection at all, but the advice he wrote on a Sunday blog post on his site, Learn To Duck, is so incisive that everyone, everywhere in the startup community should stop what they're doing and give it a good, slow read.

    It's about how advisors for startups are sinking themselves by seeking counsel by  more advisors. "When did it become a requirement to have advisors -- any advisors?" asks Baldwin. "Even if you decide that you need some help beyond what you are able to accomplish through friends and mentors, remember, you only have 100 percent of your company to sell. And, yes, every time you sign over equity you are giving/selling part of your company."

    If you aren't careful as the founder, you can wind up giving away a significant portion of your company with zero return. Just because someone is offering to be an advisor doesn't mean they necessarily know what they're doing or have your best interest at heart. Or, as Baldwin writes, "Just because you can spell Andreessen Horowitz doesn't mean you are adding any value."

    There are benefits to enlisting an advisor, like getting introduced to key investors, recruiting top talent and refining your vision -- but there's no guarantee of any of that.

    If you think you need an advisor, read Baldwin's post, and then this post by Eric Marcoullier on vetting an advisor before you take them on full force.

    David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a columnist for EGM. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.