Advisors · Startups

How should you end a relationship with an advisor that's not working out?

Earle Jr. CEO of Earle & Co. Consulting

October 23rd, 2014

After reading the post about "The Biggest Mistake You Can Make with Advisors," I know now that finding the right advisor who has the right experience, knowledge and skills and can help advise me as my I build my company is essential and should be formalized. However, what should I do when I realize that the advisor I've started working with and already given equity to is not the right fit for what my company needs at the moment or for my long-term vision of my company?
Growth hacking isn’t about quick wins and shortcuts, although they exist. In this course, we’ll cover the six-step growth hacking framework, how to measure user retention for your business, how to increase engagement and retention, and a bunch of case studies.

Anonymous

October 23rd, 2014

In regards to equity, as long as everyone in your company is on a proper vesting schedule, you shouldn't have to worry about that. If everyone isn't on a proper vesting schedule, please see a lawyer and figure that out ASAP. As for actually ending the relationship, I honestly would just talk to them and let them know you appreciate the value they bring to the table but that this value just doesn't match what you're looking for. Just be frank about it (in a respectful way of course).

- Jonathan

Chris Carruth VP/Director. Strategy | Business Development | Operations | Product | Solutions

October 23rd, 2014

Agree with all the above. I would only caution you to look at the real "why" of not being a fit? Is it because they disagree with the team's decisions, based on their experience, which was the reason you had the adviser on board in the first place?  Or is it because the advice is valuable but the adviser belittles the rest of the team? Or...the "why" is important here...


Rob G

October 23rd, 2014

"hire slow, fire fast"... and "vesting is your friend".  Same as hiring employees.   Actually, i think it is even more critical and more pronounced when evaluating advisors than when evaluating potential employees.  You can hire an employee that turns out to be a jerk or doesn't fit in or doesn't have the skills or drive that you thought and others on the team will see that as a hiring mistake and move on.  And the team knows there's a vesting schedule so there's no dead weight on the cap table.  But advisors take on a special aura.  You and your team see them as the "experts" and assume that what comes out of their mouths is gospel and you rely on them for critical strategic direction.    When you fire them the team then starts to question all the prior advise and all the direction and really starts to wonder if they need to go back and re-think prior decisions and they question how you could have made such a blunder.  It just seems to be magnified.  On the other hand, if you keep this person around and the team sees them as a 'bozo' then they question your vision/sanity even more.  Since you are looking for help and not arm-chair quarterbacking i'm guessing the formal agreement you have in place does not include a vesting schedule for this advisor's equity?  Another, perhaps bold presumption, is that this advisor is mature enough to have an adult conversation about this?  The best approach might be to fall on your sword and acknowledge that you are new to this and that you take full responsibility, and perhaps you didn't fully understand what you needed in an advisor, but you don't see this as a good fit at this time.  Own the mistake, don't make it personal.  Without a vesting schedule in writing or a clause in your agreement for how to unwind the relationship about all you can do is ask that they do the proper thing and give back some pro-rata portion of the equity... in the name of a clean cap table and good small-world-startup-community karma.  :-0