Let’s Talk About Mentorship and Advising
Entrepreneurship can be a lonely game. When you’re heading a startup, or running a startup, we always think it’s a good idea to have mentors and advisors.
But what if you yourself want to be an advisor or on a startup’s board? We sat down with Laurie Dmytryshyn, Chief of Equity Investment for PIC Investment Group, to talk about it.
TNT: Laurie, thank you so much for sitting down with me today. I want to kick this off by asking what makes someone a good advisor for an early-stage company?
Laurie: Someone who is patient, a good listener/coach, and has experience with the rollercoaster life of early-stage companies. Angel investors/advisors are often experienced business people and have the connections and experience to save founders a considerable amount of time and money. I have seen several advisors that have graciously opened up their networks to early-stage companies and it has made a world of difference to the startup. They have come across many of the same type of issues in their own careers and often know who to call to help.
TNT: And how do you choose which companies you will mentor?
Laurie: At PIC, we invest in companies that complement our operating companies or are in the agriculture or health space. When choosing companies to invest in, we first determine whether we can add value to the company. If we can’t add value, we do not invest.
When seeking out companies to invest in, we look for the following skills in the founders:
Ability to communicate with people effectively and tell their story
Good listening skills and coachability
Persistence
Recognizes their own weaknesses and surrounds themselves with people smarter than them.
We also look for founders who are honest and upfront. As investors, we don’t want to hear that everything is going great, when it’s not. Investors hate surprises - we want to know both the good and the bad. We cannot help the founders if we are not kept up to speed. There is nothing worse than finding out about a challenging situation a founder is dealing with and it is too late to help them out.
TNT: And what makes a relationship between founder/startup and advisor work?
Laurie: TRUST between the two groups is critically important, just like in any relationship. Honesty and good communication helps create trust between the two parties.
TNT: How do you think startups can effectively use you as an advisor?
Laurie: For early-stage companies, we have found it most useful to set up bi-weekly check-in meetings with the founders. To save the founder(s) some time, instead of one-on-one meetings with each advisor, we recommend they bring all their advisors together. We have co-invested with other angels and VC funds and we have found having a strong investor syndicate that communicates regularly can be extremely beneficial, and help position the company for success. We believe strongly in good governance.
TNT: What do you think of the 80-20 rule of advising? That advisors are for 80% reducing friction (logistics, recruiting, etc) vs 20% strategic guidance… Do you think this is the right balance or do you think it should be different?
Laurie: I would agree that in the early days, advisors help reduce 80% of the friction for start-ups and are only 20% strategic. As companies grow and mature, this rule should go the opposite way and boards should be more strategic versus reducing the friction.
As a practice, what we have found helpful is to add Advisory Directors to the Board of Directors of companies that we’ve invested in. This can often help the Board become more strategic as these Advisory Directors are selected based on a Board Competency Matrix. Investors don’t always have the domain expertise required to help a company succeed in a particular industry - this is where adding Advisory Directors with strategic orientations can help companies significantly.
TNT: How do you suggest companies approach you to be an advisor?
Laurie: First, determine where your gaps and blindspots are and then take the time to find the right advisor for your company. Just like investors seek out certain founders, it also goes the other way. Founders need to ensure that the advisors/investors are the right fit for their companies.
Once you have found the right advisor/investor, pick up the phone and ask for help. Many advisors are willing to give back and their advice is available for free. Just ask.
TNT: Why do you think it’s important for people to be advisors or board members?
Laurie: Companies are people. Being able to watch the founders grow and succeed and knowing you had a small part in it, provides a tremendous amount of personal satisfaction. I have found that it’s also helped me grow as a leader.
Watching founders navigate the ups and downs of entrepreneurship has also helped me better understand the entrepreneurial journey. Observing their problem solving skills and creativity in numerous situations (e.g. trying to make payroll) has helped me grow as an advisor.
My own network has also grown significantly thanks to the board and advisory positions I have held. I strongly encourage those of us in the later stages of our career to give back to younger founders – I guarantee you will not regret it.
TNT: Laurie, thank you so much for your advice and perspectives today. I really appreciate it and I know others will as well.
Laurie: You’re welcome!
*PIC Investment Group is a private, family office based out of Saskatoon. PIC is a majority owner of eight companies in a variety of industries across Canada, along with minority equity investments in 23 companies.