Angel Insights Blog

By: Christopher Mirabile, ACA Board and Launchpad Venture Group

This post originally appeared on Inc.com

If you can’t describe what a great mentor does, you’ve probably never had one.  A great mentor relationship is actually a pretty rare and special thing.  It doesn’t come about all that often, and it’s not something that can be forced.  But it is worth trying to find one or more if you can, because having great mentors can be so powerfully helpful. 

No two mentor-mentee relationships are going to be alike. The best ones almost feel like an accident.  Regardless of how the relationship starts, what all great mentors have in common is they not only help you fill in your blind spots, they help point them out in the first place.  Great mentors keep you honest, keep your feet on the ground, and will also take you to heights unimaginable.  Given this, it is worth trying to decode how these relationships work, and understand what to expect so that you can be alert to the possibility of mentors in your midst and ready to make the most of the opportunities as they occur. 

What should you look for?

Start by breaking it down. The universe of mentors can be divided into three categories:

• The “industry expert” mentor.  These are the people who deeply understand your industry, market, customers or technology and can give strategic advice and make crucial introductions.  Most people initially think of this mentor type.

• The “company-builder” mentor.  These are the battle-scarred pros who have been to the start-up rodeo before and can help with all the generic issues associated with building and scaling a company. 

• The “personal growth” mentor.  More like life coaches, these mentors take a genuine interest in you and want to help you with your personal growth and professional development.  They can help you find your voice as a leader and teach you to deal brilliantly with the sticky situations which inevitably arise.

Which type should you get?

Well, in a perfect world, you wouldn’t have to choose. Almost anyone could benefit from some help across all three categories. You need to grow, your company needs to develop, and you need customers, right? These are all important, and so, if you could use the help, try to find each kind of mentor. Leading a startup is a lonely and overwhelming job, with big ups and big downs. Having multiple coaches to help you keep your perspective can be invaluable.  Even if it is a long shot, look for as many great mentors as you can find.

How do you find them? 

There isn’t an easy answer.  Networking is part of it for sure, but an equally big part is just knowing you are on the look-out for this kind of relationship and being open to seeking the help and taking the coaching.  Asking people if they know someone who would be helpful for a given set of questions is a great start.  Getting out to entrepreneurship-focused events and organizations and meeting and talking to people can work.  Approaching people you’ve seen speak or write can be a way.  But mostly it is about asking the questions and being open to getting the help where you can find it.  If you are looking for great mentors, they will find you.

How do you know when you have found the right fit?

A mentor is the business equivalent of a wingman. You can feel it when someone has your back.  You can feel the empathy, even in the context of tough questions or really direct feedback.  Good mentors will make time for you and be responsive.  They are engaged in the problem. It won’t be the same in each case, and some will be around longer than others, but you can feel it in your bones when you’ve found a good mentor.

How do you set up the relationship?

It’s actually better to keep it a little informal and fluid at the start.  Great relationships will develop organically, and this early informal period gives you a chance to evaluate the chemistry and gauge the level of helpfulness and engagement.  When you start to rely on a mentor for more regular consultations or more involvement and help, it is probably time to formalize things a bit.

In a genuine mentorship arrangement a written agreement is sometimes used, and that’s fine (particularly where payment is involved), but a written agreement is often over-kill – after all, this is supposed to be a relationship based on trust and looking out for each other.  But formalizing the expectations both parties should have from the engagement is very important.  Naturally, compensation is one of the key questions.  Many mentors won’t want or expect compensation.  They may simply be delighted to be able to help and share their expertise, may be fascinated with the problem set, may admire you as a go-getter, or may enjoy the opportunity to give back and pitch in. 

Others will expect to be paid.  If they are good, pay them.  But by all means pay exclusively with stock (typically options).  In terms of the amount, do not over do it – many inexperienced entrepreneurs ruin their cap table giving away far, far too much stock to greedy advisors, so-called mentors, and other hangers-on.  A small-to-medium sized fraction of a single percent of your company should be more than enough. When in doubt, or when faced with a request for greater compensation, give shorter vesting rather than more stock. Keep in mind that you may out-grow their skills, realize they are too basic or too advanced for you, or become weary of their pedantic lecturing, and you don’t want them hanging around, justifying their existence, while they wait to vest their shares.  Another form of compensation is to promise them the opportunity to invest in your seed round of financing (and/or a later round).

Check them out first.

Before formalizing a relationship or giving away stock, it is essential to do a little diligence on your mentor.  Check a few blind references, especially if they are an “industry” or “startup” type mentor, find out what companies they have invested in/worked with and talk to a couple of those CEOs.  Uncover motivations, being alert to ulterior motives.  For a great relationship to work, both sides need to get something out of it, but what they want out of it should be wholesome and be secondary to having your interests at heart.  Make sure they have the necessary time to help you, and that they have the means to actually make themselves useful – a genuine depth of relevant experience, useful connections they can actually share, skills and perspectives that are up-to-date and not out of sync with the current market, or state of play in tech.

If, after a bit of investigating and some time together, you feel the relationship is going to work and be valuable, you should have a conversation about how it will work.  This is the time to talk about compensation, but even if you don’t pay them, this “calibration” conversation will validate their contribution and set up important guidelines.  Discuss the time commitment you expect, how you both prefer to communicate (email, telephone, face to face, day time, evening, weekends, etc.), and what level of responsiveness you expect when you ask questions.  Ask about conflicts of interest and for disclosure about any involvement with competing companies.  And you should very bluntly and clearly remind them that company details are confidential.  You should also clarify whether they are comfortable having their name used in connection with the company, and how they expect you to interact with introductions they make. 

Go make it happen.

Although some of these mentorship topics might feel a bit formal and awkward, it is a very important and potentially impactful relationship, and an experienced mentor will respect your professionalism.  Your mentor(s) also provide you with incalculable value, so power through this and get the relationship on a good foundation.  If you take the time to seek out the right mentor and have the important conversations upfront, down the road you will be unable to deny the importance of the role great mentors played when you look back. 

Christopher Mirabile (@cmirabile) is the Chair-Elect of the Angel Capital Association and an early stage investor in Boston MA, USA.  He is the co-Managing Director of Launchpad Venture Group and the co-Founder of angel portfolio management tool www.Seraf-Investor.com.