What a Startup Advisor Actually Does, and When You Need One
Pattern matching, decision forcing and access: the three jobs of a startup advisor, the four pricing models and what they cost, and how to tell a useful advisor from a logo on the deck in one call.
"Startup advisor" is one of the vaguest titles in the ecosystem. It covers everyone from a friend who answers texts to a paid operator who shows up every week. Founders ask me whether they need one, what it should cost, and how to tell a useful advisor from a logo on the deck. Having been on both sides, as an advisor to pre-seed and seed founders and as the operator being advised, here is my answer.
Three things an advisor actually does
Strip away the title and a good advisor does three jobs:
- Pattern matching. They have seen your situation before, more than once, and can tell you which of your three options usually ends badly. This is the part most founders think they are buying.
- Decision forcing. They make you decide the thing you have been carrying for a month. This is the part that actually changes outcomes, and it only happens if the advisor shows up on a schedule.
- Access. Introductions to customers, hires and investors. Real, but overrated. One warm introduction a quarter is a fine result. Anyone promising a pipeline is selling something.
What an advisor is not
An advisor is not an employee, not a board member and not a fractional executive. They do not own a function or a number. If you need someone to run marketing, hire a marketer or scope a project. The most common disappointment I see is a founder who wanted an operator's hands and got an advisor's opinions.
When you need one
You need a startup advisor when you are making decisions in a domain you have not operated in before, and the cost of getting them wrong is high relative to the cost of advice. For most early founders that is go-to-market: pricing, first customers, channel choice, the first sales hire. It is also the moment right after a raise, when the plan in the deck has to become a plan in the calendar. You do not need one when you already know what to do and are avoiding doing it. That is a different problem, and a cheaper one.
The four advisor models and what they cost
- Equity advisors. Typically 0.1% to 1% vesting over two years for a few hours a month. Cheap in cash, expensive in cap table, and the hours tend to evaporate after month three because nothing is holding the advisor to them.
- Hourly consultants. $250 to $500 an hour for senior go-to-market people. Good for a defined problem. Bad for ongoing judgement, because every call has a meter running and founders stop calling.
- Fractional executives. A day or two a week owning a function, usually $8,000 to $20,000 a month. Excellent when you need the function run, overkill when you need a weekly sounding board.
- Advisory retainers. A fixed monthly fee for a fixed cadence. This is the model Rich Ventures runs: the GTM & Operations Plan is 30 minutes every week for $999 a month, one year paid up front. The cadence is the product.
How to tell a useful advisor in one call
Ask them to tell you what they would do in your situation, specifically, in the first 30 minutes. Vague advisors ask more questions than they can answer and describe frameworks. Useful ones make a call, explain the reasoning, and tell you how they would know if they were wrong. Then ask what they did the last time they were wrong. The good ones have a story ready.
Finally, ask how the relationship works week to week. If the answer is "reach out whenever," the advice will not happen. The founders I have watched get real value from advisors all had the same thing in common: a fixed time on the calendar that nobody moved.
Why I run it as a weekly retainer
I spent 15 years in operational marketing and scaled a post-sales organization from $1M to $20M+ in ARR before I started advising. The lesson from the operating side was never that we lacked good ideas. It was that nobody made us decide. So the Rich Ventures advisory model is built around a standing session, a written list of commitments, and someone who is going to ask about them next week. If that is what you need, that is what we do. If you need something else, the introductory call is free and I will tell you so.
Frequently Asked Questions
What does a startup advisor do?
Three things: pattern matching from having seen your situation before, forcing decisions you have been carrying, and occasional introductions to customers, hires or investors.
How much does a startup advisor cost?
Equity advisors typically take 0.1% to 1% vesting over two years. Hourly consultants bill $250 to $500 an hour. Fractional executives run $8,000 to $20,000 a month. Advisory retainers like the Rich Ventures plan are a fixed monthly fee, $999 a month for a weekly session.
When does a startup need an advisor?
When making high-stakes decisions in a domain the founders have not operated in before, most often go-to-market, and right after a raise when the plan has to become a calendar.
Richard Yu
Richard Yu is the Managing Partner of Rich Ventures, a San Francisco startup consulting and early-stage investment firm, and co-founder and Managing Partner of Equal Parts, a restaurant and cocktail bar in North Beach. He was Director of Strategic Account Management at Lob, founding Head of Solutions Engineering at ChartHop and at Naehas, and in customer success at LeadIQ. He has scaled a startup post-sales organization from $1M to $20M+ ARR and advises pre-seed and seed stage founders on go-to-market strategy.