A "startup mentor" wants to become a founder

by CEO_16. Posted on Sep 17, 2020    13    12


So few weeks ago I posted that I wanted help regarding my idea and how do I approach investors, so you guys suggested me to talk to and create connections that could help.

I am still in the "idea phase" of my startup and I've been talking to people and seeing their response on how they feel about the product, so I happened to text a potential small investor and a startup mentor ( connected to him through linkedin ) yesterday, he told me a lot of things and the way he could help me, we were on a call for half an hour, he was getting to know the product and how he can help.

He told me that he could bring a lot of technical, non-technical people, he could get help from various industries and he has other connections as well.

After all this, at the end he tells me I can't help you in the running but I can bring a lot of inputs and contacts and hence I can become a founding member of the team.

I don't understand what should I do now? I have multiple such calls lined up, so should I talk to them? And when he says he wants to become a founding member, I suppose he'll be asking for equity?

I don't know what to do, he has asked me to give him a report by weekend on how we plan to advance further and etc.


Comments

BillW87 2

As others have said, the "cofounder" title doesn't mean much but ideally you shouldn't give it to someone who hasn't earned it. In terms of the equity that he'll likely be expecting if you do elect to make him a cofounder, THAT you should care about and think long and hard about whether he's adding value to justify it. Advisors typically get significantly less equity than cofounders for good reason. Cofounders aren't just expected to advise and provide networking (which is what an advisor does) but also are expected to WORK really, really hard to make the whole thing happen. Founders justify their share of ownership via sweat equity. Unless he's committed to working full time at the project and providing more than mentorship and connections, he's not a cofounder.

If you think his networking and mentorship brings value to the company but you don't think he's willing or useful in a full time role, counter his offer with an advisory role and a token amount of equity commensurate with an advisory position.

AdamKyleWilson 3

Don’t bring him in. The last thing you need is middle managers and “mentors” clogging things up. You don’t even have a company yet. The only people you need are those who can EXECUTE AND BUILD. If he isn’t going to get his hands dirty writing code or doing other hands on jobs then he’s dead weight.

Wahoopokie 4

I've met so many out there, running around offering advice, contacts, etc. as experts, mentors providing all kinds of input. But no output. No real work, labor, commitment, sacrifice, trust, productivity - i.e. all the parts of the "easy, exciting, BD life" with none of the hard work. Where you shower at both the beginning and end of the day. All talk, no walk. All hat no cattle. Empty suits. If he doesn't seem to be someone personally invested and prepared to work and build things - he's just another in your advisory network, perhaps some point services, etc. Not a partner or founder.

CCC_PLLC 4

Yes, founding member means equity. I would treat it as just an offer and not feel any obligation at all to take it. If you have any interest ask him what he would be doing and what he would look for in exchange (%, vesting terms, etc.), and politely decline or counter as you see fit.

If you don’t have any interest, tell him you appreciate his belief in you and your vision but you need a more active member (/etc) and have interviews with promising candidates already lined up.

Just keep it professional and you’ll be fine. There’s nothing inherently unusual about his asking, as long as he stays professional about it

mari_oh 12

From a legal point of view “founding member” is meaningless. Rather, it is more of an indicator of status within the team and to the business community.

What really matters are a clear definition of the:

roles (which he says he wouldn’t be involved in the day-to-day running),

rewards (you’d better have a clear understanding of their expectations in terms of cash and equity), and

responsibilities (you need a clear definition of what are actually productive “inputs” and “contacts” that he can bring in.)

What I worry about in your case is that it can be counterproductive if somebody brings in a lot of contacts to you but is not involved in the day-to-day work of doing something useful with those contacts.

Another thing that worries me is he is asking you for a report. A good mentor does not add to your burdens. A good mentor takes them off your shoulders.

At MIT, they have a rule about mentors for startups. The mentor can never ask for the startup for financial or operational participation first. The only way this is ever allowed to happen is if the entrepreneur is the one who makes the initial request. Mentors should be looking out for your interests first, not their own. So this is the third thing that worries me.

My advice to you:

His enthusiasm for helping you, and his long list of contacts is kind of ambiguous as you stated in your post.

Before you write a report to him, ask him to give you a one page summary of what he can contribute and what his expectations are.

He started the discussion in this direction, so it’s on him to give to you the structure of the deal he wants for himself.

If he proposes something that is clear and reasonable, then you should consider whether or not it is something you need and decide accordingly.

If he doesn’t propose something clear, then I would ask you to reconsider whether he can be an effective mentor.

I hope this helps.

  CEO_16 2

Thanks! What I am worried is that he shouldn't take the matters in to his own hands, so I don't want someone else making the bigger decisions for me, my team is capable enough of doing that

CodeInTheMatrix 2

I see that this has been mentioned in some other comments but I cannot stress that this part is the MOST IMPORTANT thing to prioritize and that is OWNERSHIP.

Call people whatever they want co-founder, CEO, CTO , CFO , investors VCs etc.

OWNERSHIP some would say is everything. I have no mentors but every single successful wealthy person has told me how important this is.

And btw money means equity - not services.

What he is providing for you is a service. idk now how things have changed but even incubators and other startup investment firms always have to give money for equity.

Just saying hey I am going to give you connections, network you to people, guide you in the business process is all meaningless. They have to put up money for any equity.

There are exceptions but please keep this as a guideline.

Lastly it is of my personal opinion that this guy is no real mentors.

Mentors are already successful people that are crazy busy with the multiple projects that they are dealing with.

You end up having to go them for something you need and in return you can offer them whatever.
And what exactly has this mentor done for you anyway? Before you reached out to him about your idea. Did he help you in college? Guide you through difficult time of your life?

Giving advice to people to me is just counseling, mentor takes initiative in your personal growth and success. The good ones don't ask for anything in return, you succeeding is their success.

That's why I hate all these self help gurus that ask for money 1st.

  CEO_16 1

No he's a startup mentor in general I connected to him via Linkedin, as I have mentioned my team is capable enough of taking all the technical decisions however some aspects of startup like raising funds equity distribution etc etc. Are something we are not familiar with and would require help in those areas.

CodeInTheMatrix 2

Yea you be careful. Someone who's career itself is that of being a startup mentor is not someone I think of as a mentor.
For me already successful people make far better mentors than people who try to make a career out if being startup helpers - there are exceptions (VC firms, Y-combinator etc)
But as an individual its iffy


If I were you , with regards to this tiny part of your process
First see what else he has helped in succeeding. Like that other guy says get an idea of what this mentors resume looks like.
Then don't just decide! Go talk to some of these startup founders about what it's like working with this mentor

Then and this is a must

  • you gotta do some "fishing" - go around see what other kind of businesses/firms/VC/mentors can help you with what you're looking for , what are they asking in return - how much will they commit to helping you succeed etc.

    This world is cut throat and rocky. Always be on your guard.
mari_oh 2

You should definitely mention this to him as well. Be clear about what kind of help your team does and does not need.

As u/CCC_PLLC mentioned in his response, there is nothing inherently wrong in his request, and it’s up to you to decide whether or not you need his help.

Although being a “founder” doesn’t have a real legal meaning, it is an indicator of status in the sense that they are consulted and have influence over the big decisions of the company. It carries social and emotional weight. So be clear with him and set the right expectations.