One thought on “Q: Advisor fee structure for startups?

  1. There isn’t a standard. It varies, depending on the startup’s other advisors, the board, the incubator, etc.

    I’m on the board of nine startups.
    – They generally have little cash, so advisors are unpaid.
    – You get pre-IPO stock. This ranges from 0.10% to 0.25% of stock.
    – Some start with 25% vested and the remainder to be vested monthly over two years to three years. It depends on the exit strategy. At the end of the term, you have options on the stock.
    – Others grant stock outright. You own the stock. You’re considered as an investor who invests time, not money, so in effect, you buy the stock with your time, or you’re paid in stock for your time.

    You must understand what these terms mean. I’m not going to write out explanations. See the startup page at my website for more.

    Be sure you’re dealing with people whom you trust.

    Part of the value in being an advisor is the connection to the other advisers and investors. Meet them. Get to know them. They can bring you into additional projects.

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