Considering hiring advisors/consultants for my startup website
- How should they be paid; what is an average fee for a professional...non professional?
- I really don't know how much time or useful info they will provide so is giving them a percentage of ownership a bad strategy?
- If I am paying them, should they be on call for me 24/7 or for a reasonable window of time each day?
Advisors Contract Website Consultants
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Hi Jimmy, I am interested in the advising stuff. I can try help you for free with some advices. Later on if we see this relationship is mutually beneficial, we could think of a reasonable renumeration. Looking forward to hearing from you. – Beta Sve 11 years ago
4 Answers
Advisor is one thing. Consultant is another. In IT for example you will only talk with advisors, whereas consultants can also program or offer valuable insight for designing/implementing your website...
- You can find the average fee by looking into consultants websites. For example an hour with one of the top JavaScript consultants costs around 1000$, but maybe you don't need top 1%, but top 10% case in which an hour can be 100$... As for advisors, you can't really know
- You should not bring a stranger as co-founder only after serious testing and if he is willing to quit everything to help you and get involved in the company. Read this: Forming a new software startup, how do I allocate ownership fairly? - Joel's (the founder of StackExchange) answer should help.
- This should be included in the contract. Not all consultants work 24/7. But some do have companies that have programmers available 24/7...
I know I answered from an IT point of view, but that's only because this is my field. Hope this helps.
Best regards!
The answer to all three questions is "it depends" I'm afraid :-)
For example my prices for consulting are vary between free and and a low four/high three figure daily rate - depending on who I'm talking to and why. Personally I never take equity. Other people are happy to. Depends what you're after and why.
I think the key question for you to have a grasp of before you go looking for mentors/consultants is "Why do I need them?".
Nebulous needs "startup advice" are hard for you to value, hard for you to find the right person, and hard for others to price.
Concrete needs like "How can I get 510K in the US for my UK companies new surgical product?" (hypothetically) are much easier for you to value, much easier for others to price, and much simpler for you to know whether the person you're talking to is the right one.
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I'm starting a niche social networking site. While I know all I need to about my niche, I do not know much about hiring programmers, web designers, SEO companies.....etc. I have put out ads for these positions and I find myself spending many many hours checking out portfolios and resumes, but I don't really know what I'm looking for. I am an artist and I can tell when a page looks professional, but that's about it. If I had someone to oversee the technical portion of putting the site together, it would free me up to focus on the site features, content, marketing...etc. – Jimmy 11 years ago
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I guess I'm asking what type of person should I hire to oversee the technical aspects, and should they be paid in equity? – Jimmy 11 years ago
I do both IT and general business advising, as well as IT consulting - though I generally refer to both as consulting. However, my rates differ depending on what I'm doing, who I'm talking to, and so on.
For example, I can be brought in at the idea level, and help with structuring the business, finding appropriate help for the founders depending on what they need, work on developing a business plan and develop metrics for success. I also work with startups that need IT help, and help them figure out what they need, and how to get it.
Alternatively (or sometimes in conjunction with the above), I may do IT consulting, where I do much of the IT development myself or with other members of my team, as appropriate.
My rates for the advising portion are significantly higher than my rates for consulting. Part of the reason for that is that with advising, the client is paying for my time, while with consulting, they are paying for someone qualified's time. It might be me, but there's no guarantee of that.
If you want actual numbers, an hour of IT consulting will range from about $50 to $150 per hour, while an hour of advising will often work out to $500+ per hour.
I never take equity for any such work - I work to help YOU run YOUR business, not my business.
First: Ask yourself - do I really need them? Shouldn't I know what I am doing in my niche?
- Likely cash (difficult for a startup), equity (difficult as well, set options for them). Don't send up with people doing 1 thing then having 0.5% equity in your company. = bad
- Shares are common for consultants as they could otherwise not be paid. Having shares will increase their motivation in general. Be very careful on giving external people shares, as this may make future investments more difficult.
- Depends on what you pay them. If they have shares it should be in their interest to help you as good as possibile.
