Questions

I've met with some advisors and have proposed the idea of them joining my company advisory board. Compensation will be paid with a small amount of equity. But, questioning what is the right amount to offer? Advisory Objectives: Plan strategy development Assist in recruiting Introductions to investors I've searched online and read some very interesting blogs. such as this one: http://fi.co/contents/206# Im not sure if the 1% is to more or less what i should be offering to the advisor. I have much respect for my advisors and hope to compensate them with the right % for their contributions. *I currently own 100 shares in my company. Im going to change that amount to 10,000 shares. We are a seed stage company but my advisors see great potential in my business and its growth. Happy Holidays Everyone!!

I had a fantastic board of advisors with some heavy hitters. Unless you know for a fact that someone will be very involved or they plan to introduce you to a ton of clients, partners or investors, the standard is pretty much 0.5%.

The most important thing I learned was that the people who wanted more ended up being the least helpful. Two people on my BOA negotiated for 1% and, although one of them provided a catalog of content that was super valuable, he was difficult to get much out of after that and not more valuable than the many people who accepted 0.5%. My most valuable advisor would not accept equity until we basically forced him to.

Look for people who dive in and help without any incentive. They should be doing it because they like you and think your business is super interesting. If they are in it for the equity, run the other direction.


Answered 5 years ago

Unlock Startups Unlimited

Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.

Already a member? Sign in

Copyright © 2024 Startups.com LLC. All rights reserved.