How much equity should I give my advisory board members?

Read QuestionsCategory: Business FundingHow much equity should I give my advisory board members?
breakouttools Staff asked 3 years ago

To be frank, these people are more window dressing than anything else. That said, they are all investors too. I would basically need to call them with questions on a relatively infrequent basis (maybe once per month), and would suggest we have all sit down to meet once a quarter.

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1 Answers
alprojam Staff answered 3 years ago

Founder Institute and Orrick have denoted three “levels of company maturity” that have different implications for how to equity compensate Advisors & Advisory Board Members: idea, startup, and growth. In addition, they qualify the terms with three “levels of engagement” that define how advisors will work with founders and have varying influence on how they are equity compensated: standard, strategic, or expert.

For example: If an advisor meets with the founding team monthly, is involved in recruiting talent for the business, and takes a few customer calls, then that advisor would be entitled to 1 percent of the company in the form of restricted stock or options, vesting over a two-year time frame. For a growth stage company, in comparison, this level of engagement would earn an advisor 0.6 percent.

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