How does it work with Investors and Advisors?

There seems to be a big misunderstanding how StartUp funding looks like.

Recently I have evaluated some SUPs and the expectation was: I bring a suitcase of money with me.

The disappointment was of course huge on their side when I asked to see more than just the Pitch Deck. Sometimes the Founders do not understand, that as Advisor or Investor I need to see behind their story. The motivation as well the overall vision are important. Intense talks with the founders are necessary. We invest into people, not just ideas and products.

In general we differentiate between

  1. founding and R&D. The money comes from grants, love money etc.
  2. Pre Seed and Seed. This money comes from Angel Investors, but sometimes early stage focused Venture Capital might join for seed.
  3. Series A+ is covered by Venture Capital or Family Offices.

1. is normally staffed by the founders, family and friends. The so called love money. Every involved should be aware that this is a high risk investment. If you invest, fire & forget. The wrong expectations can destroy friendships and families. Money is a bitch.

My advise: If you rely on the money, don’t invest.

Sometimes as well a bank can be involved. Of course interest will be charged. What a surprise.

2. is normally an Angel Investor or Investors involved with focus on early stage. Here we iterate from pitch to pitch, improve the story.

3. mostly Venture Capital or Family Office are involved with huge discussions about valuation, shares, positions, reports etc. Big biz takes place and everyone hunts for the next Unicorn.

But where does the additional support come from? Beside of the money?

We see here in general four roles.

  1. Mentor
  2. Biz Coach
  3. Advisor
  4. Investor

Advisor and Investor are specific roles, of course with slightly different goals but the approach is similar. High professionalism is needed because of the criticality of the business and the possible worst case scenario for all involved.

An Advisor can be paid on a pay-per case or flat fee base. Sometimes even shares are possible.

Biz advisor, product advisor, strategy advisor etc. the goal is to put the SUP on stable pillars, to close the gap between Vision, Strategy and Tactics.

An Investor invests money. Well his own or his investors money. They want to see success. In majority of the interaction, they get shares for money. This is the main valuation. Here real money is traded for shares. Before pandemic, money was the only part of the biz. With pandemic things started to change. Investors have to learn that a bit more is needed than spreadsheets and their own invest beside of money, biz has to grow. 

In these two roles I promise every client, they will learn to hate me. These roles have no space for friendship. Every involved should be aware that, this is a high risk investment.

I repeat this one more time: Investors and Advisors are


Mentor and his/her mentee is another story. This is a personal invest into an Entrepreneur and is mostly not involved into biz. A Mentor can push the entrepreneur from time to time into a direction. This split is highly recommended. I have not heard of (successful) paid mentors so far.  

Mentorship is the influence, guidance, motivation, emotional support, role modeling or direction given by a mentor. A mentor is someone who teaches or gives help and advice to a less experienced and often younger person. The Mentor may share with a mentee information about own career path. A mentor may help with exploring careers, setting goals, developing contacts, and identifying resources.

In an organizational setting, a mentor influences the personal and professional growth of a mentee.

There are three types of mentoring.

  • Traditional One-on-one Mentoring. A mentee and mentor are matched, either through a program or on their own.
  • Distance Mentoring. A mentoring relationship in which the two parties (or group) are in different locations.
  • Group Mentoring. A single mentor is matched with a cohort of mentees.

The Business Coach is a paid role. It has different purposes, from opening a network, training specific skills, who supports, educates and motivates business owners. They provide recommendations for a company’s vision, growth and goals. Effective business coaches provide motivation but also implement and prioritize strategies to help businesses grow.

All described roles have one in common.

Time is money.

These roles have to make fast decisions and simply live with the outcome. The timing and how much they are willing to “invest”, is in their own responsibility.

here is a beautiful visualisation

I hate this sentence but…

Love it, change it or leave it.