Luc Levesque: preference

Transcript context

…I was actually about to ask you what kind of structure you recommend for an advisorship. Is there anything else you can share about just what you'd recommend a founder do in terms of compensation for an advisor? There's a couple things. I'm a big fan of equity because of the alignment of incentives. You should think about, without getting into too much detail of the actual structure of the deals, but think about how you vest the equity. The last thing you want is an advisor holding back on sharing knowledge. The ideal engagement would be an advisor comes in, delivers as much value as possible quickly, and then trains your team. And then maybe it's a one-year engagement and hopefully they've learned because the advisor has been incentivized to share as much as possible and to train the team as much as possible. And then ideally you don't need them anymore after. So there's something there about structuring equity vesting. I'm a big fan of vesting earlier rather than later. So think about in terms of structure you're vesting, commensurate with the value you want, which is very much front loaded. I'm also a big fan of three month cliffs. Something I've done, I always do actually, is listen, in the first three months you'll know both sides if it's working or not. And you want to de-risk that on both sides because it really should be seen as a partnership between the advisor and the founder. If the founder thinks you're not adding value in the first few months, I think they should just tear it up and both sides move on. It's not good for the founder to continue the deal and it's not good frankly for the advisor because they're not, for some reason, able to add value in that environment. So I love a three-month cliff at the beginning where if it's not working in the first three months, you tear up the deal and both parties walk away and de-risk the entire thing, and again, drives incentives in the right way where the advisor is 100% incentivized at as much value as fast as possible. And so that's another thing that I tend to do and I've done it for a long time. That's a really good tip. Basically don't do it for a year if you're vesting for advisors, probably not even to a year, but yeah.…

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