How to Vet a Fundraising Advisor

Questions to Ask Every Advisor

Before engaging any fundraising advisor, ask these questions:

1. What specifically do you do before my first investor meeting? Look for structural preparation — capital structure, positioning, narrative framework. If the answer is primarily 'introductions' or 'deck help,' that's a distribution service, not advisory.

2. How are you compensated? Flat fees and advisory equity are aligned with your success. Transaction-based fees (success fees, commissions) create misaligned incentives and may indicate unregistered broker-dealer activity.

3. What's your track record at my stage and in my vertical? Ask for 3-5 specific examples. Follow up with those founders if possible.

4. Who will actually do the work? The partner who pitches you may not be the person who works with you. Know who you're getting.

5. What happens if I'm not ready to raise? A good advisor tells you to wait. A bad one takes your money regardless.

Red Flags to Watch For

Guaranteed outcomes: No advisor can guarantee funding, introductions, or specific terms. Anyone who promises results they can't control is misrepresenting their service.

Upfront fees with no deliverables: Paying $10K upfront for vague 'advisory services' with no defined scope, timeline, or deliverables is a red flag.

Broker-dealer behavior without registration: If the advisor receives compensation based on the amount of capital raised and facilitates the actual securities transaction, they may be acting as an unregistered broker-dealer — which is illegal and can jeopardize your offering.

Vague credentials: '$1B in advisory raises' is meaningless without specifics. How many deals? What stages? What was their actual role?

Pressure to sign immediately: Legitimate advisors let you do due diligence. If they're pushing for a quick commitment, ask why.

No references: Any advisor worth hiring can provide 3-5 founder references. If they can't or won't, that's disqualifying.

What Good Advisory Looks Like

A good fundraising advisor provides:

- Capital structure analysis: Helping you determine the right raise amount, instrument, and valuation range based on data and experience. - Positioning framework: Building the narrative, messaging, and materials that make your raise compelling. - Process management: Creating investor target lists, sequencing strategy, and timeline management. - Term sheet preparation: Ensuring you understand every term before you receive a term sheet, so you negotiate from knowledge. - Accountability: Regular check-ins, defined milestones, and honest feedback about readiness.

The best advisory relationships feel like having an experienced co-founder during the raise process — someone who's done this before and can prevent the mistakes that first-time founders make.

The cost of good advisory ($15K-$50K) is small relative to the value at stake in a $1M-$15M raise. A 1% improvement in terms on a $5M raise is worth $50K.