How to Evaluate a Startup Before Joining as an Advisor

A few friends have asked me to help them assess startup opportunities in the past 2 weeks.

I remember, nearly a decade ago, when a startup founder messaged me: “We’d love for you to be an advisor. We’ll give you equity.”

It was exciting. I was finally breaking into a venture-backed startup after years in less traditional ones.

But I had no idea how to evaluate whether it was worth my time. Was the company legit? Was the equity worth anything? Would this just be a waste of effort? Would this be a good learning experience?

After working with multiple startups (some great, some disasters), I’ve learned what to ask before saying yes.

The following applies to early stage advisor relationships offering equity only.

1. Do They Have a Real Plan (or Just an Idea)?

A founder with a cool idea is not enough. Startups die every day because they never figure out how to actually get customers.

Before you agree to join, ask:

✅ Do they have a product or at least an MVP?

✅ Have they talked to real customers? (If they don’t have early adopters lined up, that’s a red flag.)

✅ What’s their go-to-market strategy? (Selling to hospitals? Direct-to-consumer? Partnerships?)

If they can’t clearly answer these questions, they’re not ready for an advisor.

2. Are They Funded (or Just Hoping to Be)?

Equity sounds nice, until you realize it’s worthless unless the company succeeds.

Ask:

✅ Have they raised funding? If so, from who? If not, what’s their plan?

✅ Are they self-funded, or relying on investors?

✅ Do they have Letters of Intent (LOIs) from potential customers? (LOIs show that real buyers are interested, even if they haven’t paid yet.)

A startup without funding or a clear revenue path might not be worth your time, unless you’re doing it purely for the learning experience.

3. What’s Your Role? And Is It Clearly Defined?

Some startups say “advisor” but really mean “free sales rep.”

Ask:

✅ What are they expecting from you? (Introductions? Strategy? Hands-on work?)

✅ How much time will you need to commit?

✅ Is there a formal contract? (If not, you don’t actually have equity.)

If they expect 10+ hours a week, you’re not just an advisor, you’re part of the team. That’s great news, but your compensation should reflect that.

4. Are the Founders Legit?

A great idea with bad founders is a sinking ship.

Diligence:

✅ What’s their background? (LinkedIn, previous startups, industry experience.)

✅ Have they successfully built anything before?

✅ Do they understand the problem they’re solving?

I’ve seen many startups run by engineers with zero healthcare experience who think they could sell directly to hospitals. Startups like that burn through millions before realizing that selling to health systems takes years. And those are still better off than the startups that don’t understand the stakeholders in medicine, and the concept of “Who is going to pay for this?”

Caveat:

A close friend of mine was an early advisor at a startup that was trying to do something that had already failed spectacularly before, had no funding, and no customers. But he knew the founder well and believed in him, so he joined. That startup was Instacart and my friend made a lot of money.

Final Takeaway: Your Time is Valuable

Startups are high-risk, high-reward. The right one can open doors, teach you the business side of medicine, and even lead to life-changing opportunities.

Before you say yes, make sure it’s a real opportunity… not just a long shot with no plan.

Do it first for the learning experience. But just know that different caliber startups and founders will offer different levels of learning.

Good luck on the hunt!
Mohammed