Why Most Advisor Deals Suck
Most entrepreneurs have had disappointing advisor relationships. Travis Kalanick knows why.
Founders squeeze advisors on equity. They try to give a tenth of a percent. What you get when you squeeze too hard is either an amazing advisor that doesn't do anything for you, or a bad advisor that does a lot of bad work for you.
You try to give a tenth of a percent — you get an amazing advisor who does nothing, or a bad one who does bad work.
The Kalanick Formula
Step one: figure out what you'd pay them if they were full-time. Cash and equity combined.
Step two: calculate how many hours a week they'll actually work. That's a fraction of full-time. Give them that fraction of the full-time package.
Figure out full-time comp. Calculate the fraction of hours. Give them that fraction. You're valuing their time for what it's worth.
No Cash? Convert It to Equity.
Most startups don't have cash for advisors. Fine. Take the cash portion and convert it to equity too.
Yes, the number will be bigger than what founders usually give advisors. That's the entire point.
It's going to be bigger than what you normally give advisors. That's the point. Now expectations are built.
Now Hold Them Accountable
Once you pay fair equity, you've set the expectation. Bring the thunder or get fired.
Treat your advisor like an employee. Push them.
Bring the thunder, dude. And if you don't — you're fired. You now have an employee. Push them.