People often ask me how much an hour of my advice costs. The answer always surprises them: nothing. I have no hourly rate, no monthly retainer and no fixed project fee. When I agree to work with a startup, I take an equity stake in the company. That is it. If the company grows, I win. If it does not, I have earned nothing. In short: if I do not deliver results, I do not get paid.
Since I moved to Limassol, Cyprus, in March last year and started working as a business advisor, including at GlobalMaca Holdings, I have ended up advising quite a few startups. Founders, and other entrepreneurs who want to do the same thing, keep asking me about the model. So I have written it all down: why I work this way, what it looks like in practice, what I look for before I say yes, and where it can all go wrong.
Why equity and not fees
The first reason is simple: aligned incentives. A consultant paid by the hour has, whether he likes it or not, an interest in the problem lasting. More meetings, more reports, more billable hours. I do not want to be in that position. When I own a piece of the company, the only thing that matters to me is the same thing that matters to the founder: increasing the value of the business.
The second reason is skin in the game. Advice from someone who risks nothing is cheap, even when it is billed expensively. When my risk is tied to yours, I will think twice before telling you to burn half your budget on a campaign or to jump into a new market. I have made enough bad calls as an entrepreneur, including a sale made under pressure in 2009, to know that bad advice has a real cost.
The third reason is long-term thinking. Fees push you toward fast, visible deliverables. Equity forces you to look at what happens in two, three, five years. And most of the things that really matter in a company, the culture, the product, the positioning, do not get fixed in a month.
Last but not least, many good founders have no money. They are at the beginning, with a promising product and an almost empty bank account. If I charged fees, they could not afford me. This model gives them access to experience exactly when they need it most, without spending their cash, which in the early days is oxygen.
How it works in practice
There is no single recipe, but I apply a few principles every time:
- A small stake. Advisor stakes are usually small. I am not there to be a co-founder, and I do not want to take what the founders need to stay motivated or what they will later offer investors.
- Vesting or milestones. The stake is not handed over on day one. It is earned over time or as we hit agreed goals. If I vanish after three months, the equity does not leave with me.
- A clear role. What I do and what I do not do. Strategy, sales, marketing, international expansion, introductions, hiring, whatever it is, it has to be written down. “I will help with whatever is needed” is not a role.
- Clear expectations on both sides. How much time I commit, how often we meet, how we give each other feedback.
- A written agreement. Always. Drafted by a lawyer who knows what they are doing. Friendship and trust are wonderful, but they are no substitute for a contract.
What I look for before I say yes
Because I only get paid if the company succeeds, I am very selective. I look at three things.
The founders. Always first. A good idea with a weak team dies; an average idea with an excellent team adapts, pivots and finds its way. I want people who listen but also have a backbone, who can say no and explain why. And I want to see how they get along with each other. I wrote some time ago about how to choose a co-founder, and that remains one of the most important checks.
The market. Is it big enough? Is it growing? Can the product travel beyond Romania or its home country? I have believed for years that too many Romanian startups that could conquer the world stop short because of small ambition, not lack of talent.
My ability to help. This is the part many advisors skip. If I have no real experience in your field or with your problem, there is no point in my taking equity. I have worked in manufacturing, distribution, transport, insurance, e-commerce, marketing automation and online media. That is where I can bring something concrete. In a biotech company, for example, I would just be one more name on a pitch deck.
The risks and how to avoid them
The model has its ugly sides too, for both parties. These are the most common problems I see:
- Too much equity given away too early. Enthusiastic founders hand out percentages generously in the first months, to advisors, friends, early collaborators. Then the first funding round arrives, investors look at the cap table and get nervous. The fix: small stakes, vesting, and one simple question before every signature: “What exactly am I getting in return?”
- Advisors who disappear. Some people accept ten advisor roles, put the logos on LinkedIn and show up once a quarter. Vesting solves most of this: if you are not around, you do not earn.
- Unclear deliverables. If nobody knows what the advisor was supposed to do, nobody can tell whether he did it. Write the goals down, even qualitative ones, and review them regularly.
- My own risk. I can lose too: time, energy, other opportunities. Many startups fail; that is the brutal arithmetic of this world. That is why I work with a limited number of companies at a time and choose carefully.
How to evaluate an advisor if you are a founder
If you are just starting out and someone offers to help you in exchange for equity, here is what I would check in your place:
- What has he built himself? Not what he has advised on, what he has built. Someone who has never had to make payroll at the end of the month talks about cash very differently.
- Talk to other founders he has worked with. Ask them directly: “When you needed him, was he there?”
- Ask for a plan for the first few months. A serious advisor comes with concrete ideas, not general phrases.
- Watch how much he asks for, and how fast. Someone who wants a lot, right away and without vesting is thinking about himself, not your company.
- Check whether he tells you uncomfortable things. An advisor who always agrees with you is no use to you.
And remember: an advisor will not build your business for you. You build it. He helps you avoid a few potholes and get where you want to go faster. I collected some of my own potholes in the piece on 20 years of entrepreneurship in Romania.
Why I think this model will grow
Startups today are built faster and more cheaply than ten years ago, but experience has not become any cheaper. Young founders need people who have been through crises, exits, failures and relaunches. And experienced entrepreneurs need projects they believe in. Equity is the natural bridge between those two worlds. It is not for everyone, and some good consultants work very honestly by the hour. For me, though, it is the only way I can look a founder in the eye and say: “We are in the same boat.”
What do you think? Would you work with an advisor paid in equity, or would you rather hire a consultant with a clear rate and keep your company whole?