Introduction

Founders are bound to encounter difficulties as they build businesses and launch products. For many, navigating these challenges becomes easier with help from others who have had similar experiences.

There are two main guides that founders can turn to when they need advice: mentors and advisors.

While these roles may seem similar, they differ greatly and offer different benefits to founders. So, should you seek advice from a mentor, or should you turn to an advisor's expertise?

Here’s what founders need to know about startup mentors versus advisors.

What is a startup mentor?

A startup mentor is a non-formal role for a person who offers guidance, advice, and other support to a startup founder or founding team. The mentor doesn’t have a contract that requires them to dedicate a certain amount of time to the startup per month, nor do they typically receive any kind of financial benefits from supporting the company. 

The relationship between a mentor and a founder typically occurs naturally. The mentor serves as a role model for founders. Mentors may be fellow founders, former professors, or even friends or family who have experience in the startup’s industry and target market.

“A mentor's sort of a personal, a little less formal, sounding board. It’s someone who's been there, done that and doesn't necessarily cover what the startup should be doing, but more so what that particular [founder or CEO] should be doing,” Craig Rosenberg, Chief Platform Officer of the Go-To-Market Platform at Scale VP, told HubSpot for Startups.

Benefits of a mentor

While mentorship doesn’t come with outlined responsibilities, having a mentor can be particularly fruitful for startups. 

For instance, Forbes reported that about 70% of small businesses or startups with mentors survive for more than 5 years. Mentor reported that U.S. businesses with mentors see an increase in annual revenue by about 83% compared to businesses without mentors.

Having a mentor allows startups to seek expert advice to get through startup challenges and even sidestep common startup mistakes. These perks can be particularly beneficial to first-time founders who haven’t gone through the process of starting a company before.

Plus, startups don’t give up equity or pay mentors. Mentors aren’t employees, so startups can save money and reserve more company ownership by tapping mentors for advice compared to seeking an advisor or hiring a business coach.

What is a startup advisor?

A startup advisor is a more formal role in which a professional has signed a contract to provide guidance, advice, networking opportunities, and other support to a startup founder or founding team. The contract typically requires the advisor to spend a set amount of time per week or month with the startup. 

Advisors may review business plans, loan applications, investor pitches, and other important documents and make recommendations for improvement.

Unlike mentors, advisors are compensated, typically through equity. They aren’t exactly employees, as they don’t work day in and day out on the startup. However, they do receive a small ownership share, up to 1% per advisor, for occasional assistance with the company.

Benefits of an advisor

Advisors offer several benefits that can help startups scale and succeed. In fact, Boardio reported that companies with at least one or two advisors have a 100% higher chance of scaling successfully than startups without advisors. For startups that build an advisory board, there may be five to seven advisors, all of whom can lend their expertise to improve the company.

“When you're trying to do this as a startup, it's obviously really hard. You can't hire in all these folks, especially out of the gate when you're trying to build this thing,” Rosenberg said. “The one thing I have noticed for execs and founders who have been really successful is that they're insatiable learners, and [advisors] help them with that.”

Advisors can assist in warm introductions to investors, customers, and vendors or offer different perspectives on a question or challenge the founder is facing. 

Advisors go through a screening process so that founders can find professionals who can fill any gaps in experience and skills that the founding team is missing. For instance, if a startup needs help navigating the legalities of starting a business or accepting investor funding, an advisor can help the startup through those experiences.

“Not every startup needs one, but an effective advisory board can provide valuable insights, connections, and credibility, especially for scaling,” Raja Skogland, founder and CEO at The Visionary Company, told HubSpot for Startups.

Like employees, startups can hire new advisors when the company’s needs change, meaning the advice and guidance can update as the company scales. By contrast, a startup typically sticks with a mentor for the long term, which can be beneficial for building a trustworthy relationship but can limit the amount of advice or skill-building offered.

Key differences between a startup mentor versus an advisor

Both startup mentors and advisors play key roles in guiding startups through obstacles and helping startups grow. However, there are major differences that set these roles apart. Here’s how to tell the difference between a startup mentor versus an advisor.

Formality

An advisor is a more formal role defined by a contract. The contract will outline the advisor’s specific responsibilities to the startup, time commitment expectations, length of time with the company, and equity compensation. 

A mentor is far less formal, typically without a contract. Mentors usually grow from existing relationships with the founder, although founders can use mentorship networks to purposefully find a mentor. Still, this role is free-flowing, with no strict time commitments or obligations. As Skogland put it, a mentor is more like “a good friend who cares and wants to help” with the business.

Responsibility

Both mentors and advisors may offer advice and guidance. However, advisors help with specific projects or challenges, while mentors offer ongoing support for founders as they navigate their personal lives and careers simultaneously. 

“There's a lot of crossover, there's a lot of mentoring that an advisor would do, and there's a lot of advising that a mentor would do,” Rosenberg explained. “But generally, with advisors, you have people providing either sort of really specific guidance or have a really specific value that they bring to the table.”

Compensation

Because of the informality and flexibility of a mentorship role, mentors are usually unpaid. However, some mentors may choose to support the company by offering an investment in exchange for equity; this would be separate from the mentorship role. With an investment, the mentor also acts as an angel investor and would have a separate contract for that role.

Advisors are required to spend a certain amount of their time supporting the startup, so startups usually compensate these members in the form of equity. Startup advisors make a median of 0.21% each, according to Carta. The advisor’s contract outlines the compensation and vesting schedule specifics.

Time with company

While mentors and advisors could end up supporting the startup for a long time, their time spent with the company typically differs between these roles.

Mentors act as role models and often have preexisting relationships with the startup founder(s). Thus, they are usually around for the long term or the entire existence of the company. 

Advisors often spend shorter periods, usually up to two years, helping founders navigate specific challenges, such as establishing the business, launching a product, merging with another company, or pitching to investors.

Sometimes, founders recruit their mentors to join a startup advisory board, moving them from the mentorship role into a more formal advisor role with equity compensation. In that case, the mentor may become a long-term advisor. On the other hand, an advisor can also become a mentor over time through natural relationship-building.

Does a startup need a mentor or an advisor?

Ideally, startups should have both mentors for the founders or executives and advisors for the startup. The time to begin building those relationships or establishing those roles may vary, but the earlier, the better.

No matter which role you decide to bring into your startup, make sure to stay true to your company vision and be clear and communicative with your mentors and/or advisors.

“Take your time and look for people who care about your vision and that you admire,” Skogland advised. “Always maintain clear communication and expectations. Make sure it is a win-win for everyone, otherwise it won’t be a sustainable relationship.”

When to seek a mentor

Startups can establish a mentor at any time, and mentors can support founders throughout the various phases of the company. But, the process of finding a mentor has to be natural, and startup founders can start searching for a mentor very early on in the company, even at the idea stage.

If you don’t already have a connection to a potential mentor, focus on introducing yourself to new people and setting up recurring meetings to build on the relationship.

“I think you should take a step back and realize, ‘Who could be a mentor to me?’ By the way, if you don't have someone currently in your life, then I believe for this role that you should be talking to five valuable people a week: customers, people in the market, VCs, whatever. Five is the minimum. From there, keep that eye out,” Rosenberg said.

When to seek an advisor

A startup can consult an advisor whenever it needs help with a specific project or business challenge. 

Rosenberg explained that many startups start by seeking a market advisor, but there are various advisors startups will need to consult along the way.

“You'll want to have advisors on the sales side, the marketing side, CS, product, etc., who can, over time, understand your business but be able to bring a very specific functional expertise to the table,” Rosenberg explained.

Rosenberg also noted that even early-stage startups can benefit from advisors and an advisory board.

“This just extends your experience at an early stage,” he said.

How to find a mentor

Startups can seek out mentors, but this process usually happens organically. Friends, former professors, colleagues, former coworkers, and fellow founders all have the potential to become mentors. 

“It's really hard to manufacture mentoring. It sort of has to come to you,” Rosenberg said. “What I would say, though, is that people should embrace that. Identify those people that have had an effect on your life and build that relationship. A mentor can't be forced. It really has to be something that comes from the building of that relationship.”

Startup founders may find mentorship by participating in incubator or accelerator programs. The incubator or accelerator may assign a mentor for the duration of the program. A strong bond could lead the mentor to continue supporting the startup long after it graduates from the program.

Founders can also find mentors by participating in networking or industry events or by engaging with their role models on social media.

To establish a mentor, consider anyone who could be a role model for the startup and start strengthening that connection. Over time, that person could become the go-to for advice and naturally become a mentor.

How to find an advisor

There’s a more formal process to finding an advisor, although seeking someone to screen for the role is not unlike finding a mentor. 

Founders can tap colleagues, fellow founders, and other industry experts they know to interview for the advisor role, or they can use networking events or social media to forge new connections and ask these professionals to join their advisory board.

Keep in mind that the advisor has a contract, so even if the potential advisor is an old friend or former coworker, they should go through a screening and onboarding process to evaluate their skills and how they can support the startup. The advisor must have the experience and skills to help a startup with a specific project, problem, or phase of business.

“Look for expertise in your industry, and in achieving what you would like to achieve; a solid track record of success, and alignment with your startup’s values,” Skogland said. “Chemistry and trust are key.”

After screening, advisors will need to sign a contract and onboard into the company.

Empower your startup with both mentors and advisors

Ultimately, startups that want to overcome common business challenges, impress investors, earn customer trust, and scale successfully should seek both a mentor and advisor.

On the mentorship side, founders can receive informal but long-term support for a wide range of concerns, including balancing personal and professional factors while launching a business. 

Building a board of advisors provides more specific assistance with certain problems or projects. It bolsters the founding team with additional expertise while adhering to a small startup budget. In addition to overcoming startup obstacles, an advisory board can also build a startup’s credibility and reputation.

As such, startup founders should seek mentorship as soon as possible and consider building an advisory board early in the company if they want a greater chance of success.

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