We Can’t Do It Alone: The Power of Trusted Advisors

An entrepreneur’s existence is a constant stream of questions: How much should I spend on marketing? Am I recording this revenue correctly? How detailed should my purchase agreements be? When is the right time to raise money and should it be debt or equity? 

As an entrepreneur myself, I also have so many questions and that is why I love having people around me that I can ask for advice or just bounce ideas off. My advisors come in many different shapes and sizes: from my partner at Sage, Denise, to our paid advisors who include lawyer Gary Kocher at K&L Gates and accountant Peggy Runcorn at Eide Bailly, to more seasoned advisors like our former partner, Kevin Learned and other people whose advice I just trust. I have found that it is important to have trusted advisors around you with all sorts of different skill sets, experience levels and perspectives. 

Entrepreneurs never know what the next hurdle is going to be, so it is important to have allies on your side who are rooting for your success and can help you. That help can also come in many different forms. Sometimes it is something that they have already achieved and you get to benefit by learning from their success. Sometimes, and often more importantly, you can learn from their mistakes. Often it can be an introduction to the right person who can help solve the problem or help introduce you to your next big customer or open a door you didn’t even know existed. 

But, how do you know who is a good advisor and who is not? This is a big and sometimes difficult question, especially at the beginning of a relationship. A few things I have learned:

• With paid advisors, you will often get some amount of time that is free or pro bono to see if you and your advisor are a good fit. This may mean an hour-long conversation discussing what you are looking for and whether or not their experience is relevant. Generally someone who is asking for money before you  have even had an initial conversation (or honestly, two or three) isn’t going to have your best interests at heart. They will also be upfront with you if they aren’t a good fit and potentially make introductions to other people who might be a better fit.

  
  

• Which leads me to the next thing, are your interests aligned? Even with paid advisors your interests need to be aligned - both of you have to agree that your end goal is one that you both want to achieve. For me the goal was to grow the world of Revenue Based Financing. This meant our lawyers and accountants had to be willing to enter into a new territory in finance that hasn’t been fully developed. If they weren’t comfortable working in a world where we are the ones writing the definition, then we weren’t going to be a good fit for each other.

  
  

• Be sure that you and your advisors are comfortable and aligned on where your business is going. One way that can help you do this is by paying your advisors in equity vs. cash. Not all advisors are open to this, but some, like those that join your Board of Directors, definitely should be. Anyone who is joining your Board and isn’t interested in your equity is likely not aligned with your mission. 

  
  

• Be careful that any unpaid advisors are in it for the right reason. They should be there to help you build an amazing business and not for self-promotion or because it looks good on their resume.   

At Sage, we have repeatedly witnessed how the right advisors can be a tremendous asset to helping companies grow, but also how the wrong advisors can be a huge detriment or even liability. As a result, we have been working on ways to assist our portfolio companies access great advisors. We have an amazing community of investors in our funds as well as many terrific people that we have met throughout our years in the investing world.  

We recently launched our Sage Advisors Program to provide our portfolio companies with a way to access strong and trusted advisors from that community; people who can help them continue to grow. If you are a company seeking funding and interested in gaining access to our advisor network, you can apply here. If you are one of the awesome people in our network who has something to offer and you want to join our Sage Advisors program, please reach out here. 

For those of you that have supported and continue to support entrepreneurs on their journey, and especially those who have supported me and Sage on our journey – thank you – we could not do it without you!

About Sage Growth Capital

Sage Growth Capital makes revenue-based investments in companies at any stage who need growth capital. It is our mission to provide a more flexible, non-dilutive funding option to growing companies who do not fit traditional equity or lending models. To learn more about Sage Growth Capital or to apply for funding visit: www.sagegrowthcapital.com.

About Revenue-Based Financing

Revenue-based financing (RBF), also referred to as royalty financing, revenue share or revenue-financed capital (RFC), is a non-dilutive form of growth capital where investors receive a percentage of monthly revenues until a set amount has been paid. RBF differs from equity financing as the investor does not obtain ownership of the company and it differs from debt financing as there is no collateral required and payments are variable. RBF is designed to empower entrepreneurs to grow their businesses with non-dilutive capital that aligns with their sales cycles.