Advise Like an Investor: The Company Selection Filter
Your advisory portfolio is an investment portfolio — pick for the liquidity event, not the logo
- Difficulty
- Moderate
- Time to result
- ~ongoing to results
- Steps
- 5
- Confidence
- 90%
For anyone considering becoming a paid-in-equity advisor, Levesque argues the single highest-leverage decision is not the advice you give but the companies you choose. Since you are compensated in equity, you are an investor whose capital is time. He runs a written criteria list — a spreadsheet — over every candidate company, checking not just whether he can succeed but whether the company will succeed and reach a liquidity event within a horizon he can wait out.
Origin
Luc Levesque's own selection process, built up over years of advising Twitter, Pinterest, Patreon, Thumbtack and Canva, and applied like the spreadsheets he uses for every other major life decision.
Core principles
- 01An advisor paid in equity is an investor with a time-denominated cheque.
- 02You can do great work and still get nothing if the company never reaches liquidity.
- 03You have a small number of slots — selection dominates execution.
- 04Assume a ten-year horizon and structure accordingly.
How to run it
- 1
Adopt the investor's frame
Before evaluating whether you can add value, evaluate the company as an investment. You are putting in scarce hours and taking equity; the return depends on the company succeeding and reaching a liquidity event, not just on you doing good work.
- 2
Keep a written criteria list and grow it
Maintain a spreadsheet of criteria and questions you ask yourself about every prospective company. Add a criterion every time an engagement teaches you something. Run every new opportunity through it and check whether it ticks the boxes for a likely good outcome.
Pro tip The criteria list compounds — its value comes from the accumulated post-mortems of past picks.
- 3
Underwrite a ten-year hold
Go in assuming you will be with this company for ten years, and say so out loud to the founder. This is a partnership: they take risk on you, you take risk on them. Only pick companies you'd be happy to still be attached to a decade from now.
- 4
Match the deal terms to the horizon
If you are underwriting ten years, the paper must survive ten years. Negotiate a long tail on options or RSUs so the equity does not expire before the outcome lands.
Watch out Standard expiry windows will kill an otherwise perfect thesis.
- 5
Take the impact bar seriously
Once selected, focus exclusively on impact. Advisor quality varies enormously; the differentiator is being the person whose arrival visibly moves the numbers. Aim for impact so large it needs a slide in the next board deck explaining what happened.
Pro tip Do fewer engagements and take each more seriously — Levesque advises rarely now, precisely so each one gets real focus.
In the wild
For his first advisory engagement, connected through a VC while still at TripAdvisor in Canada, Levesque took no equity and no money at all. He simply tried to have as much impact as possible, then used the relationship to get connected to people he wanted to meet in the Bay Area.
→ The engagement snowballed into an advisory practice spanning Twitter, Pinterest, Patreon, Thumbtack and Canva — showing that the first pick can be underwritten on network return rather than equity return.
Common mistakes
Picking for prestige instead of outcome
Choosing companies for the logo or the interesting problem while ignoring whether there is a plausible liquidity event means you can do a decade of great work and see no reward.
Expecting a fast exit
These companies can take over ten years to exit. Advisors who go in expecting a quick outcome get impatient, disengage, or structure terms that expire.
Is it for you?
Best for
Senior operators being offered their first or second equity-based advisory roles who need a selection discipline rather than a flattered yes.
Not ideal for
Cash-fee consultants with no equity exposure, or advisors doing a single pro bono engagement for network access.
From the transcript
“around the same one as an investor so the most important thing an advisor can do aside from having impacts and knowing their craft is…”
“over the years I've just added criteria and questions to ask myself about the company”
“mindset when I'm deciding to work with a company I'm in there for 10 years and I know that”
“so I don't do these too often anymore but when I do advise I I take them very seriously I focus exclusively on having impact”
From the episode
Leveraging growth advisors, hiring well, mastering SEO, and honing your craft
Luc Levesque (Shopify, Meta, TripAdvisor)