Thread by @adamhjk

Let’s talk about Mike Kail being convicted. Full disclosure, I’ve met Mike a handful of times socially - he was definitely in the same infrastructure and venture scene. We have lots of connections. My recollection is he was nice and eager to be helpful. justice.gov/usao-ndca/pr/f…

In that scene (executive/founder/venture) it is very common to be introduced to other founders or executives, for the specific purpose of giving advice and aid. I try and do this as often as humanly possible - I never say no (sometimes it’s a “not this week”, but never “no”)

Sometimes you do that and everyone clicks - your advice is helpful, the team likes you. At that point it’s common to offer an advisory role - that usually comes with a small stock grant. I always turn these down. For three reasons.

The first is personal - if you give me compensation, what goes from being a kind bit of aid to a fellow traveler turns into a job in my head. I already have a job. I don’t need a million side jobs.

The second is practical - I see a lot of companies, and meet a lot of founders. I want to help all of them if I can. But they often compete *with each other*. If I have advisory stock in A, I shouldn’t be helping out competitors. That would be unethical.

I’m careful to tell people this when I know their is conflict, and I’m careful not to share what I learn. That I’m helpful but not invested is what lets me do that.

The third is because of conflicts of interest like this. I don’t only talk to founders - I give advice to companies on what they should consider and why. If I’m an advisor with equity to your company, I both need to disclose that, and it taints my perspective and advice.

When someone asks me what I think, I want to be able to say it with a clear conscience and without a massive internecine web of entanglements. So my position is simply to just say no.

(Side bar - Chef had tons of advisors like this. They all gave meaningful advice for very short periods of time. I love all of them. SI will have zero. Because none of them needed comped for the advice they would’ve given freely)

Another layer is the ease with which you can double dip with consulting fees. Coaching and management advise is a real industry with high value. But it’s also an easy way to get a little extra for not a big time investment! Why meet for an hour for free when I could make $$?

I’ve seen founders have meetings with folks they were introduced to by venture they wanted to raise from. Then *in the meeting* be told they should get advisory shares or cash consulting fees to “help them raise successfully”.

What starts out as accepting a common courtesy (advisor shares) quickly can turn in to a lucrative side hustle, that’s in direct conflict with your work, your ability to give advice. No threat to your integrity there, no bribery. Just good old capitalism at work.

But then you come to expect it. It feeds your ego (it feels *great* to help people). The money is always nice. Next thing you know you aren’t accepting what’s offered - your selling. Then you’re making it more legit - starting a little LLC for your management advise, maybe.

Then you’re talking to Sumo logic at a VC dinner, become an advisor and consultant, and help them get in the door at Netflix (and you forget to mention the conflict of interest, because you tell yourself you don’t want to taint the process by having them know you love Sumo)

Then you’re suddenly juggling all those responsibilities, hustling to make good on all those “advisory” roles. It goes from “helping fellow entrepreneurs get started” with “how to navigate the enterprise sales process” to “spending years in prison for bribery and kickbacks”

Faster than you might expect. The willingness to cross the small lines leads quickly a snowball of big lines. I bet Mike didn’t start out thinking: ha, let’s build a bribery machine.

Instead, he was doing what people do *all the time* in Silicon Valley: just dipping his toes in all over, seeing where he might make some money, and help people who need it! It’s the dream!

But then you like the money. You plan on it. The expectations revolve around it. And what was honest help at first is a federal bribery conviction - that you deserve.

So, my summary advice: don’t offer advisory shares. Don’t ask for them. Don’t double dip with management consulting. And the big kahuna, which should never need to be said: do not fucking lie.