How much equity should I give my startup advisors?

How much equity should I give my startup advisors?

An advisor may receive between 0.25\% and 1\% of shares, depending on the stage of the startup and the nature of the advice provided. There are ways to structure such compensation to ensure that founders get value for those shares while retaining the flexibility to replace advisors without losing equity.

What is an advisor agreement?

An advisory agreement should be used between a company and its advisor. The agreement sets forth the expectation of the relationship like work to be performed on behalf of the advisor and compensation. The agreement should also set forth certain key terms like confidentiality and assignment of work product.

What is an advisory board for a startup?

Advisory Boards consist of a group of individuals selected by the entrepreneur who provide advice and help the company succeed. They are separate from a formal Board of Advisors. Entrepreneurs can select advisors based on needed skills or voids to fill within their company.

Should you hire a financial advisor for Your Startup?

Such advisors can help streamline the process by front-loading a lot of the diligence and preparation, allowing you to focus more closely on running the company. They can also help provide access to a broader set of investors.

Should you hire an advisor when raising capital?

Investment banks or other types of advisors can add a lot of value when raising a round of capital, particularly at the later stages. Such advisors can help streamline the process by front-loading a lot of the diligence and preparation, allowing you to focus more closely on running the company.

Should you hire a fundraising advisor?

Tl;dr: If you are early stage, you should not use a fundraising advisor to represent you in your raise as VCs hate them and don’t want to pay fees. If you are late stage, either hire someone full time or use an advisor.

Should you hire a startup consultant?

If you need help, the safest thing to do is hire a consultant by the hour to teach you what to do. Startup sucks and fundraising is a bitch. That’s the opening line on my blog and you might have nervously laughed atit because deep down you know it is true.