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Prospective investors and advisory work remuneration

Something I wish I had known sooner as a founder when seeking investment:

🤔 You have difficult decisions to make

🚒 Survival can be your no.1 priority and that can lead to tough decisions that jeopardise your long-term future.

⚠ Some will play on this.

🗣 E.g. A prospective investor may want to tie their investment to advisory work.

Unfortunately, this happens a lot.

🚸 It seems to happen more in less mature tech ecosystems markets.

Wales has more than its fair share of these types!

It's not impossible that it works out.


Tying the two (advisory remuneration & investment) together is dangerous.

😶‍🌫️ The investment can obfuscate whether or not that's the best use of capital for shareholders.

❓ It's also potentially questionable behaviour from that investor too because they should know that they are creating a dilemma.

📚 My learning from this is:

1. You need to want to hire that person as an advisor anyway 💼

2. The prospective investor should want to invest regardless of any prospective work ✍

If your answer to number 1 is 'no' then steer clear, it's almost certainly not the best use of shareholder capital.

If their answer to number 2 is that investment is dependent on the advisory work... I think the answer should be the same.


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