Many times I see startups taking consistent time to brag about their advisors when pitching. This happens a lot with new founders. Well, surprise-surprise, I don’t think they are as relevant as some founders consider.

Why?

1. Advisors don’t run the business

One of the most important parts of a startup is the team. The founders are the ones running the show. They are the ones spending their time, energy, money, reputation, etc. to make the company a success. And they should be the ones compensated the most, of course.

Having relevant advisors is a nice to have (and not a must-have). Sure, advisors can show that you are well connected. It’s great to see relevant people to that you can reach. But if you pitch them as your secret to success, then why not invest in them directly?

2. Limited skin in the game

Many advisors are involved with multiple startups, and their contributions can be minimal, limited to introductions or occasional advice. In exchange for this, they often receive anywhere between 0.25% and 1% equity.

Well, other people, called “investors” are doing the exact same thing but they also contribute with money. They put their money where their mouth is. If startups were to ask advisors to invest in their companies, how many advisors would there still be?

That’s the thing - skin in the game is a big part of it. While an investor is directly impacted by your success, advisors don’t care as much. They did not pay for it. Who would say no to free equity? Since they believe so much in you and can guide you though hurdles, why wouldn’t they invest?

In my experience, I saw both cases:

•Startups with advisors;

•Startups with super knowledgable people as investors (even though they don’t often invest) who were grateful for having the opportunity to invest;

And I can tell that most successful startups are in the second option (cannot give names, of course).

3. Advisors as a job

Some advisors are “full-time advisors”. Investors see them on pitch decks all the time. If you have one of those, don’t expect investors to throw money at you all of a sudden, but rather question your reasoning of why you put those people on your slides. It can easily backfire. Also, given that they are involved with many companies, how can they spend the relevant time with you?

Conclusion

Don’t get me wrong, some advisors can be helpful. But so many times first-time founders overestimate their importance. It’s always best to showcase your team and then your investors. This brings 10x more credibility.