I am starting a SaaS company which helps real estate companies manage their assets. I know a managing director in an investment bank doing business as broker to help the small real estate companies sell their assets to bigger real estate companies.The managing director knows well how to increase selling value of the real estate. Some of the know-hows are directly related to the development of my SaaS. Knowing those know-hows would help develop a better SaaS system. Moreover, the managing director has good connection with the real estate companies, small to big ones. The real estate companies are the direct client of my SaaS system.
So I asked the managing director to be an advisor. However, he replied that he needs to check if he has any conflict of interest.
What kind of conflict of interest could it be? What kind of people could be an advisor without conflict of interest. Obviously, I wanted people that know the industry to be an advisor - an insider not an outsider.
This person very likely has an agreement with the bank they are already working for. His agreement should outline the procedures he needs to take declaring conflicts of interest as well as barring certain activities. Also depending on the regulations and laws in that region there might be legal reasons why he can't advise, maybe has been required to take an ethics test , if he is knowledgeable and honest about his profession he should know all the rules already. If this person is only serving as an advisor in your company and is not a partner then I do not believe there would be any risk to you if he is breaking any rules , all the risk and responsibility would be on him. This of course is assuming your not dealing with securities or a few other items that fall under the SEC or equivalent in your area.