Start-ups of Melbourne rejoice! As we reported yesterday, start-up incubator PushStart revealed that it is to hold its first mentor speed dating event, Mentor Live, in the city next week.
The event, following a Sydney version, is part of a mentor program that has several hundred start-ups on board.
Entrepreneurs in Queensland aren’t being overlooked when it comes to mentorship either, with Queensland Leaders telling us this week that they have been deluged by applications for its three-year hand-holding scheme.
Start-up mentorship is a booming industry. Whether its AngelCube in Australia or Vodafone in Silicon Valley, seasoned business operators appear to be falling over themselves to help the next big thing.
But once you have the ear of a mentor, what should you be getting out of the relationship? And, crucially, what things should be looking for in a potential mentor in the first place?
We talked to the experts to glean the 10 qualities you should seek out in your business guru.
You may have cosied up to a heavy-hitting entrepreneur who has the experience and skills needed to help your business to the next level. But do they actually care enough?
“It’s great to have an entrepreneur who is worth $100 million and has exited four companies, but they need to have bandwidth,” says Andrew Birt, co-founder of AngelCube.
“In a good mentor relationship they will get as much value out of it as you. It will provide them with the buzz they had when they started up.”
Rob Antulov, director at Hall Capital Strategies and PushStart mentor, says: “Mentors should have a willingness to help. There is always a balance between altruism and pragmatism. But there are always people around who want to help and make a difference.”
2. Sector experience
While you need a generalist mentor, you also need a specialist. A mix of the two is ideal. What you don’t want is a mentor with no idea of the industry you’re operating in.
“A mentor needs a good breadth of experience, but enough sector knowledge to help you,” says Antulov.
“They need credentials in your area. Look them up on LinkedIn to see their experience and ask around about their reputation.”
3. Fee free
If a potential mentor is looking for a regular fee you should steer clear. In the start-up phase you need as much free advice as possible. If necessary you can offer future rewards but don’t be ripped off.
“If a mentor wants an hourly rate that’s not what you are looking for,” says Birt.
“Firstly, it makes you think ‘if you’re so successful, why do you need an hourly rate?’ Secondly, it means your motivations are mis-matched.”
“A better way is to enter into an equity investment, maybe between 1-5%. I’d be hesitant, however, if someone wanted 10-15% of my business in return for just advice.”
Invariably you will charge ahead with the launch of your business, convinced that you have the product or service the world has been waiting for. A good mentor will tug on the reins a little.
“Entrepreneurs’ optimism, which is great, can blind them to the possible negatives of what they are doing,” says Antulov. “A mentor should be able to offer their pragmatic experience to balance this out.
“They should have an idea of the future potholes that you may face. They will know what other businesses have fallen down on before, whether that’s IP, a licensing deal or whatever.”
Similarly, a good mentor will eliminate any worries or concerns that prove to be baseless, so that you can concentrate on building your business.
“You can’t be on day two of your business and be worried about section 37, paragraph two of your shareholders’ agreement,” stresses Antulov.
“Of course, if you leave some things, such as IP or cashflow issues, for too long, it is risky. But you have to make a judgement call as to what to worry about.
“Some entrepreneurs get tripped up because they leave too much, while others are too conservative and waste too much time.
“A good mentor will say ‘worry about that in three or four months’ time. Concentrate on getting customers and cashflow until then.’”