Advisor for the company

Advisor grants at early-stage startups commonly range from about 0.1 to 1 percent, depending on the company's stage, how much time the advisor gives and how critical their expertise is. Earlier companies and more involved advisors sit at the higher end. Grants are usually stock options or restricted stock that vest monthly over one to two years, often without a cliff or with a short one. Tie the grant to a clear scope, so both sides know what is expected.

A written agreement should cover the scope of help and expected time, the equity grant and its vesting schedule, what happens to unvested equity if the relationship ends, confidentiality and IP assignment for anything the advisor contributes, and conflicts, such as advising competitors. Standard templates exist, such as the Founder Institute's FAST agreement, which many startups adapt. Have the grant approved by your board and recorded on the cap table like any other equity.

Start with the specific gap, such as enterprise sales, regulatory approval or hiring an engineering team, rather than looking for impressive names. Look for people who have solved that exact problem recently at a similar company. Ask your investors and other founders who helped them most. Try a few working sessions before offering equity, since the best advisors are often people who were already helping informally.

Advisors give guidance but have no formal authority. You can take or ignore their advice, and the relationship can end easily. Board members have legal duties to the company and its shareholders, vote on major decisions such as financings, executive hiring and acquisitions, and are much harder to remove. Many companies use advisors for specific expertise and reserve board seats for investors, founders and a small number of independent directors.