The Mentorship Gateway - A Stepping Stone to Angel Investing
It has been said that the most remarkable quality of a leader is their ability to lift others as they rise. There could not be a more appropriate quote to describe the relationship between a mentor and mentee in the world of entrepreneurship. It may surprise some readers to know that it's both the mentor and mentee that get lifted. This blog explores the aspects of a healthy mentorship and how it can lead to angel investing.
Mentorship is the dedicated guidance on decision making and support in building out the business that an experienced professional can provide to an entrepreneur. Often this guidance is offered to simply give back to society. Mentorship is usually a one-on-one relationship but group mentorship also has its benefits. It allows for the cross sharing of ideas, stories, mistakes, lessons learnt and current challenges often involving startups on parallel paths.
Mentorship is a two way street, with both the mentor and mentee benefiting from the engagement. In a recent survey 50% of mentors said they simply enjoyed the mentoring experience of giving back and shaping how businesses develop. 43% of respondents in the same survey said that mentoring helps them learn, grow, garner new insights and stay sharp. Mentors often learn new techniques and approaches from being immersed in an innovative environment where entrepreneurs are continuously pushing the boundaries and trying to disrupt traditional operating models. This fresh perspective may help mentors in their own work.
Mentorship, like angel investing, is about making a personal connection with the founder(s). After months of working together it gives good insight on the entrepreneur’s ability to execute and on whether the working relationship has found its groove. This is the basis of angel investing and the reason why mentorship makes for a good stepping stone. The big difference being that with angel investing you’re committing more than just time.
How does mentorship differ from other supportive roles for entrepreneurs? While similar to the role of a business coach, mentorship is usually provided at no cost and driven by the entrepreneur. A business coach is a more formal relationship, traditionally charging a fee for their support as they guide entrepreneurs through various frameworks. Once learnt the relationship is at an end. An advisor offers formal advice based on their expertise which can range from strategic matters to granular operational matters. It's common practice for startups to form a board of advisors, which involve several independents who could over time be compensated with a token equity share, usually less than 1%. Lastly, being a non-executive director in a business forms part of the business’ corporate governance infrastructure and is another way of guiding developments at a startup.
Entrepreneurship is often a lonely journey, mentorship or other supportive roles can be effective on many different levels for a startup. When times are not going well founders often question themselves and second guess opportunities. A grounded voice goes a long way in a storm.
A healthy mentor-mentee relationship is trust based. Listed below are a few tips that will help you develop a good rapport:
Do your homework on your entrepreneur. Understand their background and their motivations for doing what they are doing.
Understand where help is most needed. Do they have a good handle on finances? How realistic is their vision in their industry? Can they take calculated risks? You are likely to find different types of entrepreneurs. Make sure you are comfortable helping them grow in the areas they lack; a deeply visionary entrepreneur may lack focus on the details or a detailed focused entrepreneur may need a clearer overview of their business.
Once chosen, keep in mind what an entrepreneur may be feeling. Impostor syndrome is a barrier to building rapport. Reframe feedback in the form of stories and allow the entrepreneurs to draw their own conclusions. Often asking questions rather than making statements are a better way of getting a message across. If you have entrepreneurial roots, take time to remember how it felt. Chances are that feelings of being misunderstood, yoyo’ing motivations, fear and financial concerns are drowning out the joy that comes with creating a new path.
Set expectations early. Ensure that you have a clear understanding at the onset. Discuss the length of the mentorship cycle and the frequency of your contact sessions. These may change as you go along but clear communication is critical so that everyone is on the same page. Also maintain boundaries; while their plate may be overflowing, you should not become a crutch for them.
Don't do work for them or give advice when you don't know enough about a topic. Be honest and find a resource for them.
Lastly, listen actively and visually. Make the entrepreneur aware that they have your full attention.
Mentorship is an evolving relationship, find common ground and what works best. Reaching the original objectives may not mean the end. Earlier in the blog we spoke about the different support roles you could assume, a mentor could become an advisor or a non-exec director. Moving through these roles will give you a different view of the team and the mechanics of the business.
Everyone has great ideas, all the time! It takes real courage to bring them to life. This is what makes entrepreneurs special; they are crazy enough to try and potentially change the world as we know it. On their own the journey is tough, but with support from the right people, the journey can be eased. A mentor not only walks beside an entrepreneur but also casts a light so their path forward is brighter. As incredible as it is to be a game-changing entrepreneur, it is equally amazing to be the person who helped make it happen!