“The delicate balance of mentoring someone is not creating them in your own image, but giving them the opportunity to create themselves.” — Steven Spielberg
Let’s say a local entrepreneur reaches out to you to join his mentorship program. He wants to meet with you every other week in exchange for 2% of the company.
Of course, you feel special but understand that he naturally has made the same offer to others as well.
Is it a good deal?
While I hope, hope, hope that this is a serious person whose intentions are pure and noble this little thing worries me: “in return for 2% of the company.”
I would be very hesitant about this. If you’re going to do it then have a lawyer look over the document before signing anything.
In the best of worlds this person is going to give you soild, tangible, and valuable advice that’ll not be of use to you in this business but far into the future.
My experience however says that this offer is just a way to get in early and get a slice of the next big startup idea. He wants to be in that ecosystem and make sure he hedges his bets.
Let’s say he invites let’s say 150 different entrepreneurs/students. He’s only going to have so much time for each. If your idea takes off then he’s going to be there all the way.
However, it will come at the expense of someone who might need his help and guidance more. The same is true in reverse. Let’s say you’re not doing so well. How can you be sure he’ll show up when you need him? He’s “only” got 2% of your company and such a small piece probably won’t incentivize him work hard for you.
Giving away a piece of your company in exchange for what could or could not turn out to be a good person and fit for your business is a big gamble.
I’d much rather see you have a person take 51% of the company but give you all the tools and advice you need to make it a success. However, I honestly don’t think that a person willing to do that would even want that big a share. Unless, you know, it’s going to blow the industry.
In short I’d advise you not to leap on it before having a lawyer look it over. Do NOT accept any lawyer suggested by or involved with the mentor.
The cash spent on the lawyer to either say “It’s good” or “It’s bullshit” will be well spent just to make sure you have a way out in case things go south.
Also, there’s a lot of free mentorship out there. I suggest you start by looking up This Week In Startups & Gary Vaynerchuk on YouTube. Get on Goodreads and read books/listen to audiobooks from people who’ve gone through the process themselves.
It can save you a lot of time and hassle.
Check out the video at the bottom, while it’s not directly applicable the same basic principles apply. While I don’t feel you should look at it like “They’re all out to screw me!” just knowing how to properly vet mentors, coaches, investors, services, etc will help you along the way.
Again, I hope that this is something legit that’s good for you and your peers. Just be very, very careful.
Make sure to safeguard yourself and your business first.
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