How to Hire Million-Dollar Business Advisors

About this video

Dan explains how to find, attract and compensate business advisors without giving away the business, drawing on his own companies — he names Travis Kalanick, Eric Ries and Sean Ellis as formal advisors he had at Flowtown and Clarity — and on a friend who had reached about a million in revenue and was being asked for large equity stakes. Step one is to close the gaps: identify the ’experience buckets’ where you lack education or experience (he gives HR, finance and legal as examples) and recruit advisors for those, often via referrals, noting that consultants who have never been asked to advise can be good candidates. Step two is pay to perform: he warns against paying equity for introductions, and puts typical formal advisor equity in tech/SaaS at 0.1% to 2%, usually on a two-year vest with a six-month cliff; alternatives are cash (retainer, stipend, hourly or success fees) and social currency — public thanks and reporting back on what you did with their advice. Step three is communicate context: send monthly email updates and hold quarterly meetings so advisors are never out of the loop. He closes with his Dream 100 resource: 10 mentors, 30 advisors and 60 peers.

Key takeaways

• Start from your gaps: list the experience buckets where you lack knowledge, then recruit advisors to close each one.
• Never pay equity for introductions — compensate for performance, credibility and real involvement.
• Typical formal advisor equity is 0.1% to 2%, usually vesting over two years with a six-month cliff.
• Cash (retainers, stipends, success fees) and social currency — public credit and reporting back results — are valid alternatives to equity.
• Keep advisors informed with monthly updates and quarterly meetings; his Dream 100 framework targets 10 mentors, 30 advisors and 60 peers.

Episode details: published October 12, 2020 · 12:48 long. Summary written by Self Growth Videos from the episode itself. Business results and any income figures mentioned are Dan Martell’s own claims, shared for education — they are not typical or guaranteed.

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