Executive search firms have said that the demand for such consultants in the startup ecosystem has increased three to four times from pre-Covid levels.
“Scalability is the biggest issue these startups are trying to solve,” said Reet Bhambhani, senior partner at executive search firm EMA Partners. “Most of them have adequate access to capital, and now they want experienced hands. Almost every startup is now trying to bring in advisors, either non-trusted advisory board members, advisors or even on their boards.
For example, self-drive car rental service provider Zoomcar, Uri Levin, a mobility guru, was brought on board earlier this year as chairman of the board to help it expand internationally, while edtech firm SimplyLearn hired Deborah Quazzo. Brought to you, which is a well-known name. The education investment space for advice on new products, pricing and target audiences.
Online mattress brand Wakefit.co signs wood specialist BK Jamal Industry, as a consultant on scalable production set-up, while Bizongo, an ecommerce platform for customized goods, recently created an advisory board, bringing in Manish Choksi, vice-chairman, Asian Paints.
Harsh Kumar Bhanwala, former chairman of NABARD, recently joined the board of directors of Arya as an independent director, to mentor agritech startups as it scales the ecosystem through agri-services portfolio and then prepares from.
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“The growth is driven by more startups going public or planning for the future,” said Anuj Roy, managing partner at executive search firm Fidius Advisory. “Plus, when startups bring senior advisors on board, it gives them more credibility if an investment round is ready.”
In most startups, where the average employee age is between 26 and 32, these consultants, many of whom have decades of experience, provide specific domain expertise, strategic direction, and know-how.
“It’s definitely a helpful balance. It provides different experiences and different perspectives that can benefit management and other employees,” said Greg Moran, CEO and cofounder of Zoomcar, which is expected to launch in the coming year. Eyeing a US listing.
Levine’s “appointment will help us expand internationally and further disrupt the market with ZMS,” Moran said.
Krishan Kumar, CEO, SimplyLearn, said Quazzo’s inputs are extremely valuable and his years of experience will be highly beneficial to a company where the average employee age is 26-27.
Echoing this sentiment, Bizongo CEO Aniket Deb said, “Manish’s (Choksi) three decades of entrepreneurship and leadership experience will be invaluable in driving the growth of the business.”
He added that following the recent Series C fundraise, Bizongo is “focusing on building a strong portfolio of customized goods and increasing its efforts to expand into international markets”.
Startups find that it makes business sense to bring in experienced people in an advisory role.
“The mentorship we get from senior members is of great importance. They have experienced market uncertainties and can expect unforeseen challenges as well as hidden opportunities,” said Anand Chandra, co-founder, Arya. “However, new startups may find advisory positions more cost intuitive and affordable,” he said.
Kumar of Simpilern said, “Usually we see senior advisors getting higher ESOPs and lower cash component. However, in more mature companies, the cash component may be higher. In unicorn companies, such advisors or board members are can be paid up to $250,000 (approximately Rs 1.85 crore) (including cash and equity) annually.
Sometimes, consultants are being brought in for short-term or specific projects—in some cases to IPO-ready the company. In other cases, there are longer-term contracts for 24-36 months.
“People get compensation between Rs 2-6 lakh per day for working 2-3 days in a month,” said Bhambhani of EMA Partners. “In smaller startups, they may even have a profit-sharing arrangement in exchange for their time,” she said.