What’s the appropriate way to terminate an advisor relationship that isn’t adding value?

This was my response to a question on Quora.

The person had provided this additional information: We do 24 month vests and are about a year in with someone who just isn’t adding much value. We don’t want to burn the bridge but feel it necessary to unwind the relationship. Other than simply picking up the phone to let this person know, what other steps do we need to take to do this properly?

My response

Different people will have different styles, and different personality types will deal with these situations very differently.

My style is to have an honest conversation. State your expectations, highlight where the delivery has not been as expected, assess if the reasons were within the individual’s control, and provide an opportunity for the person to respond. And ask the person what you think is a fair way forward.

In most cases, if you present a fair assessment of how things are going, the person may himself/herself offer to step aside. Of course, if the person is not agreeable to stepping side, then you need to do what is in the best interest of the company.

Of course, it is also possible (and often that is also the case) that the company itself was not able to leverage the advise and inputs of the mentor/advisor. And that is also a reality that needs to be dealt with. If that situation is unlike to change, even then having an honest conversation and saying “I don’t think we are geared to make full use of all the good advise you give us. We are just too bogged down with other priorities, which I understand you may or may not agree with. But for now, we have decided to focus on those. How do you suggest we move forward. Can we disengage for a bit and see if there is merit in reengaging when we are in a better position to benefit from your wise advice?”.

(And of course, the shares vested till then should be given to the advisor).

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Author: Prajakt Raut

Prajakt Raut is the founder of Applyifi.com, and author of the book for startups - ‘Starting Up & Fund Raising’ Prajakt personal goal in life is to encourage and assist a 100,000 people to become entrepreneurs. _____________ Prajakt is the founder of Applyifi - an online platform that provides startups a 36-point scorecard and assessment report on the venture's investment readiness [www.applyifi.com], and helps them improve their odds of getting funded. Prajakt is also the founding partner of The Growth Labs, a platform where growth-stage companies get sharp, incisive advice from senior professionals and experienced entrepreneurs. [www.thegrowthlabs.in] Before starting Applyifi, Prajakt was the head of operations at IAN, founding member of a leading incubator, and the Asia-Director for TiE (2004 - 2007). Previously Prajakt had co-founded Orange Cross, a healthcare services company, and was part of the founding team member of Idealake Technologies. While in college Prajakt had founded a printing business and has spent over 10 years working in leading advertising agencies. Prajakt’s book, ‘Starting Up & Fund Raising’, helps startups understand an investor’s perspective, and helps them improve their odds of getting funded. The book also helps entrepreneurs understand the building blocks of a business.

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