Should I Take a Consultant or Advisory Role I’ve Been Offered With a Startup or Company?
- 6 days ago
- 6 min read
Increasingly, physicians are being sought after by startups and health tech companies building clinically relevant products. Physician consultants and advisors can provide invaluable insights into areas such as on the ground necessity, market viability, & regulatory hurdles. Having a physician advisor can also help products gain credibility in the marketplace. While these roles can have both professional and financial benefits for physicians, not all roles are appropriate for each physician depending on their goals. We often get questions in our online physician community from doctors approached by companies regarding a role who are looking for guidance. Before saying yes to a position, it’s important to evaluate it through multiple metrics, including medical, financial, and business lenses. Below are key questions to help you determine whether a consultant or advisory role position is aligned with your values and goals.
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Questions to vet the startup or company
As you assess a consulting opportunity, it’s important to understand the company itself, and whether you believe in its mission and its ability to achieve it. You’ll hear time and again that most startups fail. Especially if you’re not getting compensated in your time upfront and all of your upside is in equity in the company, you’re going to want to think about whether you believe the shares you receive for your time will ever have any value. We’ve discussed how angel investors and venture capitalists vet opportunities, and many of these questions investors ask apply here as well.
What is the problem the company is trying to solve? Does it address a need or gap in the market, and do you believe in that need?
There are a lot of products and services in development that don’t align with an actual need in the industry. Physicians can offer invaluable insights into if solutions are relevant, especially in a clinical setting. Without a meaningful value add to the industry, it will be difficult to sell. In addition, if you don’t believe in the product or the company’s mission, it will be hard to champion them in an advisory role.
What stage is the company in?
Risk levels can change depending on the stage of a company. Earlier stage startups have higher risk, but can also potentially offer a higher upside in terms of equity and potential compensation.
Consider asking specifically:
How much funding have you raised?
Who are your investors?
What milestones has the company achieved so far?
What is your go-to-market strategy?
Who is on the team?
A company is more than their founder, but you want to be able to believe in both the founder and the team working for them. A strong team, as much as a strong product, can create a higher potential for success. Understanding who you will be working with also helps ensure personalities and visions align.
What are the long term plans for growth for the company?
As you evaluate the fit of a role, it’s helpful to understand what exit strategy the owners have. Ask if they have IPO plans, if they are targeting a future acquisition, or if they have a vision for long-term, independent growth. This can help you evaluate not just what your equity (if applicable) may potentially be worth, but what type of long-term time commitment you’re making.
Questions to assess the consulting or advisory role
Once you understand the company and have decided you want to help support the company, you’ll next want to look at what you’re being asked to do, whether you feel you can deliver on that specific role, and how you’ll be compensated for that time.
What exactly will my role be?
Titles can be vague or can mean different things to different companies. You’ll want a clearly defined work scope for this role to understand their expectations, including:
Time commitment (how often you’re expected to contribute in a month or quarter, for example, as well as the length of engagement)
Type of role: will you have decision making authority or is the role more symbolic? What type of decision making will you be involved in?
Who will you be interacting with in this role and in what capacity?
Deliverables required (i.e. attending meetings, providing strategic input, speaking on behalf of the company, research, social media postings, etc.)
Will my name or brand be used in any way, and what control will I have over what is put out under my name?
How will I be compensated?
Compensation structures for consulting and advisory roles vary widely, depending on the company and their goals, their stage of maturity, and what your exact role is. Compensation may be structured as:
An hourly rate or a project-based fee
Equity, through options or stocks
A hybrid model of cash + equity
If you’re being offered equity, especially with an early stage startup, you’ll want to get an idea of what that equity may be worth. Consider also asking:
What is the company’s current valuation?
Are these shares versus options?
What is the current strike price or fair market value of the type of option you are receiving?
What percentage of ownership does the offered equity represent?
What is the vesting schedule?
What happens if the company is acquired?
What is the potential for dilution?
We’ll write more about typical offers for various situations in a separate article, but in the meantime, see some of the resources below.
Related PSG resources:
What happens if things don’t work out?
This is less a question to ask directly and more one to consider carefully as you negotiate an agreement. You’ll want to make sure you’re protected–and know your options–in a worst case scenario.
Have a written contract in place that clearly states:
Terms of the agreement (including compensation & equity vesting details)
A termination clause
Malpractice or other liability insurance or protections, if necessary
Don’t assume something to be true until you have it in writing and signed.
Related PSG resources:
Questions to ask yourself as you consider a consulting or advisory position
Along with vetting the company and opportunity, ask yourself a few questions to help assess if this position is the right fit for you. You don’t want to run into a situation where a side gig can risk your reputation or your license, or where you take on too much at once.
Consider:
Will this role help my career? Is it something I’m going to enjoy?
Does this create any conflict of interest with my employer or another side gig? Does my employment contract restrict me from participating in this role in any way?
Could this impact my credibility as a physician?
Does this opportunity expose me to any regulatory or legal risks (i.e. Stark Law, etc.)?
Can I make the time commitment they’re looking for?
Is this a pathway to something bigger, like more board roles, a chief medical officer role, or consulting?
Related PSG resources:
Conclusion
Working as a consultant or an advisor for a startup or other healthcare company is an exciting way to expand your impact beyond the clinical setting. Advisory roles can also grow your professional network and lead to additional opportunities, but the wrong opportunity can waste time, create legal risk, or impact your credibility as a practicing physician and thought leader.
Additional consulting & advisory resources for physicians
Related PSG resources:
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