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Introduction

Building a startup is no small feat, and having the right support system can make all the difference. A board of advisors offers expertise, connections, and credibility, helping founders navigate challenges and make informed decisions. In this blog, we’ll explore what a board of advisors is, why every startup should consider building one, how to find the right advisors, and how to structure their compensation, including a breakdown of equity benchmarks.

What is a board of advisors?

A board of advisors is a group of experienced professionals who provide guidance and strategic insights to your startup. Unlike a board of directors, advisors don’t have legal responsibilities or decision-making power, making their role more flexible and informal. Some typical characteristics:

• Typically includes industry experts, seasoned entrepreneurs, or investors.
• Focused on advising on specific areas such as fundraising, scaling, or product strategy.
• Offers guidance without the legal and fiduciary obligations of a formal board of directors.

Why do startups need a board of advisors?

Having a board of advisors can bring immense value to your startup:

1. Strategic guidance: Advisors provide specialized knowledge in areas where your team may lack experience.
2. Credibility boost: A strong advisory board signals to investors and stakeholders that your startup is serious and well-connected.
3. Network access: Advisors open doors to valuable connections, including potential customers, partners, and investors.
4. Fundraising support: Advisors can help refine your pitch, provide warm introductions, and validate your business to VCs.

How to find the right advisors

The success of your advisory board depends on choosing the right people. Here’s how to find and recruit them:

• Identify your needs: Determine which areas of your business need the most guidance (e.g., marketing, technology, operations).
• Leverage your network: Start by reaching out to mentors, industry contacts, or investors who align with your needs.
• Attend events: Networking at industry events or startup competitions can connect you with potential advisors.
• Use online platforms: Platforms like LinkedIn or networking groups like The Fourth Effect and Angel Capital Association can help you identify and approach experienced professionals.

When reaching out, be clear about your expectations, the time commitment involved, and the value they’ll gain by joining your journey.

How to structure advisor compensation

Compensating your advisors fairly is crucial to building a strong and committed board. Equity is the most common form of compensation for advisors in startups. A graph shared by Peter Walker on LinkedIn outlines typical equity benchmarks for advisors based on their involvement and the startup’s stage: 

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Key takeaways from the graph:

• Early-stage startups: Advisors typically receive higher equity percentages due to higher risks and fewer cash resources.
• Later-stage startups: Equity percentages decrease as startups gain traction, but advisor roles become more specialized.
• Strategic vs. general advisors: Strategic advisors with niche expertise or extensive networks command higher equity stakes.

Tips for offering advisor equity

1. Time-based vesting: Implement vesting schedules (e.g., 2-3 years) to ensure advisors remain engaged.
2. Role-specific adjustments: Adjust equity offers based on the depth of involvement—a hands-on strategic advisor may warrant more equity than a passive advisor.
3. Market benchmarks: Use benchmarks to ensure your equity offers are competitive yet sustainable.
4. Set clear expectations: Define specific roles, responsibilities, and deliverables tied to equity compensation.

Conclusion

A well-structured board of advisors is a game-changer for startups, providing the guidance, credibility, and connections needed to thrive. By understanding what advisors bring to the table, finding the right people, and compensating them fairly, you can set your startup up for long-term success. Leveraging tools like equity benchmarks ensures that your advisor relationships are both strategic and sustainable—benefiting your team, your advisors, and your investors alike.

Introduction

Raising money for your startup without any revenue might feel like an uphill battle, but it’s far from impossible. Investors know that many early-stage companies are pre-revenue, especially when building something innovative. 

What they want to see instead is evidence of potential — whether through customer discovery, market validation, or your team’s ability to execute. By demonstrating traction in these areas, you can prove that your idea is worth investing in, even before the dollars start rolling in. In this post, we’ll explore the key strategies to impress investors when your startup hasn’t generated revenue yet.

1. Understand what investors care about

Investors understand that at the early stages, revenue isn’t the main focus — it’s about the foundation you’re building for future growth. Instead of focusing solely on financials, they look for other signals that indicate long-term viability and growth potential:

💡Validation of your idea: Investors want proof that your idea resonates with potential customers.

📊Market potential: Highlight a large and growing market that your solution can address.

⚡Execution ability: Demonstrate that you have the skills and plans to deliver on your vision.

Show that you’re taking the right steps to understand your customers, refine your product, and position your business for success. 

2. Double down on customer discovery 👤

Customer discovery is one of the most powerful ways to show that your idea has legs. Investors want to see that you’ve done the hard work to identify who your ideal customers are and understand their needs. This process not only validates your idea but also provides concrete data to support your pitch.

• Identify your ideal customer: Use targeted questions during interviews to uncover who is most likely to buy your product. Tease out insights by asking:
  • What is the biggest challenge you face in [your domain]?
  • How do you currently solve this problem, and what’s missing?
  • What would a perfect solution look like to you?
• Highlight patterns: Summarize recurring themes and pain points from your interviews. For example, if 70% of respondents struggle with a specific issue, it demonstrates a clear demand.
• Present measurable outcomes: Share quantitative data such as the number of interviews conducted and survey responses collected.

When presenting to investors, emphasize how customer discovery has guided your product development and ensured you’re solving a real, validated problem.

3. Build evidence of traction 📈

Even if you’re not generating revenue, you can still show investors that your startup is gaining momentum. Highlight early indicators of interest and engagement that demonstrate traction.

• Sign-ups: Share the number of people who have joined your waitlist or signed up for updates. Consider making your waitlist a paid one — this’ll show investors your consumers are serious about using the product. 
• Community engagement: Point to an active social media following, engaged forum discussions, or email open rates.
• Beta results: If you’ve launched a beta program, provide testimonials or key results that highlight your solution’s impact. Demonstrating this traction — through both interest and validation — helps investors see the potential in your startup:
  • Usage Metrics: How many beta users are actively using your product?
  • Feedback Insights: Highlight recurring themes in feedback, such as specific features users found valuable or areas for improvement.
  • Outcome Data: Present measurable results, like time saved, cost reduction, or other quantifiable benefits beta testers experienced.
  • Testimonials: Include quotes from beta users about how your solution has helped them.

These metrics show that people are excited about your product and willing to take action, even in its early stages.

4. Your team is your superpower 🦸

Many times, a strong team can outweigh the lack of revenue in an investor’s eyes. They want to know you have the right people to execute your vision and adapt to challenges.

• Highlight relevant experience: What expertise or industry knowledge does your team bring to the table? How does it directly relate to your startup?
• Showcase collaboration: Share how your team’s complementary skills make you uniquely equipped to solve this problem.
  • This might mean having co-founders who each bring complementary skills to the table, such as one focusing on the business side (strategy, sales, and operations) and the other specializing in the technical aspects (product development, engineering, or technology).
• Emphasize passion: Investors want founders who are genuinely committed to their vision.

Your team’s track record and chemistry can instill confidence that you’ll deliver on your promises.

5. Leverage strong narratives 📚

Storytelling is a powerful tool to connect with investors and make your pitch memorable. Your narrative should answer two critical questions: Why now? And why you?

• Why now: Tie your solution to current market trends or shifts, showing why the timing is perfect.
• Your founder story: Share your passion for solving the problem and why it’s personally meaningful to you.
• Vision for the future: Paint a picture of where your startup is headed and the impact it could make.

A compelling narrative helps investors see beyond your current stage and envision your startup’s full potential.

Conclusion

Revenue is important, but it’s not the only measure of a startup’s potential. By showcasing thoughtful customer discovery, early traction, and a strong, motivated team, you can build investor confidence and secure funding for your vision. Remember, investors are looking for founders who are resourceful, resilient, and ready to tackle the challenges ahead. Even without revenue, these qualities can set you apart and drive meaningful conversations with potential backers.

Why fit matters in fundraising 🤝

When fundraising, it’s easy to feel like the power dynamics are tilted in favor of investors. But it’s important to remember that choosing an investor isn’t just about securing capital — it’s about finding the right partner for your business. A strong fit ensures a long-term partnership where strategy is aligned, value extends beyond capital through expertise or networks, and cultural alignment minimizes friction to keep your startup moving forward. Let’s walk through what you should be looking for in VC and angel investors while capital raising. 

Create your own investor criteria 📊

Before pitching, take time to define what you need in an investor. By setting clear benchmarks and criteria, you can evaluate potential partners more effectively. Here are some key areas to consider:

• Industry expertise: Do they have experience in your sector or with similar business models?
• Network access: Can they introduce you to customers, partners, or follow-on investors?
• Support style: Are they hands-on or hands-off, and which approach works best for you?
• Track record: Have they successfully supported startups at your stage of growth?
• Alignment on exit strategy: Do they share your vision for the future, whether it’s scaling to IPO or pursuing acquisition?

Ask investors questions too: it’s a two-way street! ↔️

Remember, fundraising is as much about you evaluating investors as it is about them evaluating you. Approach meetings with the mindset of a mutual interview. During conversations, look for signs of alignment and partnership potential:

• Ask about their portfolio: What companies have they invested in, and how have they supported them?
• Understand their expectations: What do they look for in a founder, and how do they measure success?
• Gauge their involvement: How often do they interact with portfolio companies? Are they accessible during critical moments?
• Talk to a founder in their portfolio: Reviews are always helpful. What do the other founders in their portfolio have to say about their experience?

Red flags to watch for 🚩

Not every investor is the right fit, and it’s important to spot warning signs early. Here are some red flags to keep in mind:

🚩Misaligned priorities: If they push for rapid growth at the expense of sustainability, it may create tension.

🚩Lack of transparency: Avoid investors who are vague about their decision-making process or terms.

🚩Negative feedback: Speak to other founders in their portfolio and look for patterns of dissatisfaction.

🚩Overstepping boundaries: Watch out for investors who want too much control or involvement in day-to-day operations.

Trust your instincts and don’t be afraid to walk away if something doesn’t feel right.

Building a strong, mutually beneficial relationship 🌟

Once you’ve identified the right investor, focus on building a strong partnership. Here’s how to make the most of your relationship:

• Set clear expectations: Align on roles, communication frequency, and milestones early.
• Leverage their expertise: Don’t hesitate to seek advice or ask for introductions — that’s part of their value.
• Communicate openly: Keep them informed about progress, challenges, and pivots to maintain trust with regular updates.

A strong relationship can make all the difference as you navigate the ups and downs of scaling your business.

Finding the right investors with Capwave

Fundraising is about more than just securing a check, it’s about finding the right partner to support your vision. With Capwave, you can streamline the process of identifying investors who align with your goals, values, and strategy. Our investor bios help you evaluate fit, set clear benchmarks, and approach conversations as a mutual evaluation, ensuring you build relationships that drive long-term success. Remember, the right investor isn’t just a source of capital — they’re a collaborator in your journey, and Capwave is here to help you find them.

Introduction

The startup world is full of myths that can mislead even the most ambitious founders. From funding misconceptions to unrealistic growth expectations, these myths often set entrepreneurs up for unnecessary challenges. In this post, we’ll debunk some of the most common startup myths, so you can navigate your journey with clarity and confidence.

Myth 1: You need a perfect idea to start

Reality: Successful startups often begin with imperfect ideas that evolve over time. What matters most is execution and adaptability. Many iconic companies, like Instagram and Slack, started as something entirely different before pivoting into their current forms. Instead of chasing perfection, focus on:

• Solving a real problem.
• Gaining feedback early.
• Iterating quickly based on customer needs.

Myth 2: You need to raise a ton of funding to succeed

Reality: While raising funds can help accelerate your growth, you don’t need millions to get started. Many successful startups begin by testing their ideas with minimal resources, generating early revenue to fund operations, and raising only what they truly need to reach their next milestones. Focus on proving your concept and creating value first — funding will follow as a natural next step when it aligns with your growth goals.

• Test your idea with minimal resources.
• Generate revenue early to fund your operations.
• Evaluate how you’ll use the funding to support your long-term goals.

Myth 3: A great idea will automatically attract investors

Reality: A great idea is just the starting point. Investors care more about execution, market potential, and your ability to build a sustainable business. 

• To attract interest, demonstrate traction through customer discovery, beta tests, or early revenue. 
• Show that you’re solving a real problem for a validated market. 
• A well-thought-out plan and evidence of progress will make your idea far more compelling.

Myth 4: You must scale as fast as possible

Reality: Rapid scaling without a strong foundation can lead to operational chaos and burnout. Sustainable growth is often more beneficial in the long run. Instead of chasing growth at all costs:

• Focus on building a solid product-market fit.
• Ensure your team and systems can handle increased demand.
• Prioritize quality over quantity in your growth efforts.

Myth 5: You need a perfect product to launch

Reality: Many successful startups begin with a Minimum Viable Product (MVP) rather than a fully polished solution. An MVP allows you to test your concept, gather valuable feedback, and iterate quickly. Waiting for perfection can delay progress and prevent you from learning what your customers truly need. Launch with what’s functional and improve as you go—investors value adaptability and customer-driven development.

Myth 6: A great product sells itself

Reality: Even the best products need strategic marketing and sales to reach the right audience. Founders often underestimate the importance of visibility. To ensure your product gains traction:

• Invest in storytelling and branding.
• Build a go-to-market strategy.
• Leverage your network and partnerships for distribution.

Myth 7: You need to work 24/7 to succeed

Reality: Hustle culture glamorizes overwork, but burnout is a real risk for founders. Building a startup is a marathon, not a sprint. Sustainable success requires balance. To avoid burnout:

• Set boundaries and prioritize self-care.
• Delegate and build a strong team.
• Focus on high-impact activities instead of being busy for the sake of it.

Myth 8: You have to do everything yourself

Reality: Trying to wear all the hats can slow you down and lead to inefficiencies. Successful founders know when to delegate or bring in experts. Consider:

• Outsourcing tasks that aren’t your strengths.
• Hiring strategically to complement your skills.
• Leveraging tools and technology to streamline operations.

Myth 9: Startups only succeed in big cities

Reality: With remote work and online resources, startups can thrive from anywhere. Many founders are building successful companies in smaller cities or even rural areas. To leverage location independence:

• Tap into global talent pools.
• Take advantage of lower costs in non-metro areas.
• Use online platforms to connect with mentors, investors, and customers.

Myth 10: Failure means you’re done

Reality: Failure is often a stepping stone to success in the startup world. Many renowned founders failed before achieving greatness. The key is to learn from mistakes and keep going. When facing setbacks:

• Analyze what went wrong and why.
• Use lessons learned to improve your next venture.
• Stay resilient and focus on growth.

Conclusion

The startup world is challenging enough without falling for common myths. By debunking these misconceptions, you can focus on what truly matters—solving problems, building relationships, and driving meaningful growth. Remember, there’s no one-size-fits-all formula for success, but staying informed and adaptable will help you navigate your entrepreneurial journey with confidence.

The startup journey is as much a mental challenge as it is a strategic one. While founders are often focused on building products, finding customers, and securing funding, the right mindset is the foundation for navigating these challenges and achieving long-term success. A well-informed founder is better equipped to lead their team, attract investors, and navigate market shifts. The truth is, your mindset shapes your decisions, resilience, and ability to lead effectively. Here are three key options to cultivate a strong founder mindset, with examples of how successful entrepreneurs have used these strategies to thrive.

1. Masterclasses: Learning from the Experts 🎓

Building a strong mindset starts with knowledge. Founders who invest in their education gain the tools to make better decisions and avoid costly mistakes. Masterclasses allow you to learn directly from experienced entrepreneurs and industry leaders who’ve been through the highs and lows of building successful startups.

Brian Chesky, the co-founder of Airbnb, often credits his success to learning from other entrepreneurs and constantly educating himself about different aspects of business. By soaking in lessons from industry leaders, Chesky was able to steer Airbnb through multiple challenges, including the early struggles of convincing users to trust his platform.

🔎Where to Look: Capwave offers masterclasses designed for founders of all backgrounds. Led by a capital-raising expert who has raised over $400M+ for founders, you’ll access exclusive tried and true insider tips. From fundraising strategies to scaling operations, these classes provide actionable insights to tackle your toughest challenges and avoid common pitfalls.

2. Executive Coaching: Unlocking Your Potential 👥

Great leaders aren’t born—they’re coached. Executive coaching provides a space to reflect, grow, and refine your leadership style. It’s not just about solving problems; it’s about unlocking your full potential. The pressures of running a startup can lead to burnout, and executive coaching ensures you have the tools to stay balanced and focused. By addressing mindset and leadership challenges early, you can prevent issues that might derail your startup’s progress.

Satya Nadella transformed Microsoft’s culture by adopting a growth mindset and emphasizing empathy in leadership. Through coaching and personal development, Nadella inspired Microsoft’s shift toward innovation and inclusivity, propelling the company to new heights.

🔎Where to Look: zant is the secret weapon for founders, offering tailored memberships designed for entrepreneurs and startup leaders. zant provides access to executive coaching, business growth resources, networking opportunities, and exclusive discounts — all aimed at scaling your startup and achieving success. In January 2025, Capwave Premium is teaming up with zant to bring founders even greater support, combining their expertise in executive coaching with fundraising tools and tailored mentorship to enhance leadership growth.

3. Advisors and Mentors: Building Your Support Network 🤝

No founder succeeds alone. Advisors and mentors provide guidance, industry insights, and a sounding board for critical decisions. Building an advisory board or finding mentors can help you fill knowledge gaps, expand your network, and gain valuable perspective.

An advisory board is particularly useful for navigating complex challenges like entering new markets or securing funding. Meanwhile, mentors can offer encouragement and accountability to keep you on track.

Sara Blakely, founder of Spanx, often credits her mentors and advisors with helping her navigate the challenges of scaling her company. By surrounding herself with trusted experts, Blakely was able to stay focused on her vision while making informed strategic decisions.

🔎Where to Look: The Fourth Effect and Angel Capital Association are excellent resources to connect with startup advisors and mentors,and find angel investors.

Bringing It All Together

Mindset isn’t just about staying positive—it’s about being prepared, resilient, and open to growth. Masterclasses, executive coaching, and advisors each play a unique role in shaping your mindset and equipping you to lead your startup effectively.

If you’re ready to invest in your mindset, start with Capwave for masterclasses, fundraising tools, and advisory connections. For personalized leadership support, explore zant’s coaching services, which combines executive coaching, networking, and resources to help founders grow and scale. In January, the two will provide a comprehensive toolkit designed to help you thrive as a founder with Capwave Premium. 

Your startup’s success begins with you. Focus on developing the mindset, skills, and network you need to thrive.

Fundraising is tough. Even the most innovative startups can stumble if they make avoidable mistakes when seeking capital. The good news? A little preparation goes a long way. By avoiding these 10 common pitfalls, you can boost your chances of closing your round faster and more successfully. Let’s dive in. 

Mistake #1: Contacting the Wrong Investors

Blasting the same pitch to hundreds of investors in the same database without understanding their focus or interests isn’t just a waste of time—it’s a missed opportunity to connect with someone who truly aligns with your vision. 

How to avoid it: Research potential investors thoroughly and be sure to tailor your outreach emails accordingly. You can also use Capwave's investor-matching tool to filter by stage, industry, check size, and more—helping you connect with the right investors faster.

Mistake #2: Weak Storytelling

Your numbers might be impressive, but if you don’t connect them to a bigger vision, your pitch will fall flat. Investors want to believe in you and your mission, not just your product.

How to avoid it: Build a narrative that clearly answers “Why now?” and “Why you?”. Craft your pitch around your mission and market opportunity, and make sure your passion shines through. Check out this presentation by Y Combinator for insider tips! 

Mistake #3: Not Preparing for Investor Questions

Nothing sinks a pitch faster than being stumped by basic questions about your business metrics or market landscape. Investors see this as a sign you’re not ready to scale.

How to avoid it: Anticipate tough questions and practice your answers. Not sure what investors might ask? Download our free Investor Q&A Prep resource on the Capwave website!

Mistake #4: Overvaluing Your Company

Setting an overly high valuation might feel like you’re “shooting your shot,” but it can backfire by turning off investors who see unrealistic expectations as a red flag.

How to avoid it: Benchmark your valuation against similar companies in your industry and stage. Tap into advisors for further guidance.

Mistake #5: Lacking a Clear Use of Funds Plan

If you can’t articulate exactly how you’ll use the money you’re raising, investors may assume you’re not ready for their capital.

How to avoid it: Break down your funding needs by category (e.g., hiring, product development, marketing). Show how each dollar will drive measurable growth.

Mistake #6: Ignoring Investor Feedback

Dismissing feedback or failing to adjust based on investor input can come across as arrogance—a major turnoff for potential partners.

How to avoid it: Stay open-minded. Even if you don’t agree with every suggestion, acknowledge the feedback and demonstrate you’re coachable.

Mistake #7: Not Following Up Effectively

Reaching out once and waiting for a response isn’t a follow-up strategy. Investors are busy, and your pitch can get lost in the shuffle.

How to avoid it: Stay organized with a fundraising CRM. Capwave.ai’s CRM helps you track outreach, schedule follow-ups, and ensure no opportunity slips through the cracks.

Mistake #8: Overcomplicating Your Pitch Deck

A cluttered, text-heavy pitch deck confuses investors and makes it harder for them to see your vision. Make sure you’re breaking down concepts into understandable bites so that everyone in the room stays engaged.

How to avoid it: Keep your deck concise (10-12 slides max) with clear visuals and simple messaging. Use our free pitch deck template to ensure you cover all the essentials without overwhelming your audience. You can also try pitching to a friend or colleague, and ask them to repeat the key highlights back to you.

Mistake #9: Waiting Too Long to Start Fundraising

Running out of runway before initiating conversations puts you in a weak negotiating position. Desperation isn’t a great look when raising capital.

How to avoid it: Start your fundraising efforts at least 6-9 months before you’ll need the funds. Build relationships with investors early, so they’re familiar with your progress.

Mistake #10: Forgetting to Build Relationships

If you treat fundraising as purely transactional, you’ll miss out on the trust and goodwill that turn an investor into a long-term partner.

How to avoid it: Connect with investors well before you’re ready to raise. Join communities, attend events, and engage with potential investors on platforms like LinkedIn and Capwave’s Slack network.

How Capwave can support your fundraising journey:

✅AI investor matching tools: Explore Capwave’s investor-matching feature to find investors who are aligned with your stage and story, so that you never have to sift through an outdated database ever again.

✅AI pitch deck analysis: Our AI has been trained on hundreds of pitch decks that have actually been invested in, ensuring you receive actionable insights to take your deck to the next level

✅Founders-only Slack: Upgrade your networking game by joining a private community of founders ready to connect with you.

✅Investor CRM: Stay organized and track your progress with our built-in investor CRM.

✅Expert-led masterclass and webinars: Access our exclusive fundraising masterclass and exclusive webinars to level up your skills.

Conclusion

Fundraising doesn’t have to be a guessing game. With the right tools and strategies, you can focus on building relationships and telling your story—not worrying about avoidable mistakes. At Capwave, we’re here to simplify your fundraising process with AI-driven tools, tailored insights, and an engaged community of founders and investors. Sign up today and take control of your fundraising journey.