Big News: FounderDating is joining OneVest to build the largest community for entrepreneurs. Details here
Latest Notifications
You have no recent recommendations.
Name
Title
 
MiniBio
FOLLOW
Title
 Followers
FOLLOW TOPIC

Question goes here

1,300 Followers

  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur
  • Name
    Entrepreneur

Best practises on giving equity to board advisors?

Is it standard for board advisors to ask for equity upfront?
What are the pros & cons?

We are a crow-powered platform and one of the advisors - an industry expert we have been speaking to is keen in being paid in equity and says its "good" for the company.

Quoting him - "it is easier to commit something with an equity, when there is a mutual win-win to make progress. And I think it bring credibility for the company too, when people have been ready to commit to it for equity and in that way trust to the entity. "

Is this now the standard? Sorry if this has already been covered in a previous thread.

Thanks in advance-
Priya

14 Replies

Priya Prakash
0
0
Priya Prakash Entrepreneur • Advisor
Designer-Founder, D4SC-Changify
Sorry - that should read "crowd-powered" :)
Matty Sallin
4
0
Matty Sallin Entrepreneur
System Financial, Inc.
In my experience, not a single advisor or potential advisor has ever asked for equity up-front. I've always offered it (or even badgered them to let me know what they felt was fair). The fact that they are pro-actively asking for equity raises a red flag in my book, but that's just me.
Joe Mellin
3
0
Joe Mellin Entrepreneur
View My Learnings
I wouldn't or if you do give them .25% If they are asking for a percent or more I would run.

Just dont make the mistake of giving away equity to successful people thinking that your problems will be solved when that person comes on board.

I did that with my first venture. Complete waist.

All the smarts in the world cant replace hard work and talking to customers.

Happy to connect on skype if you want to talk more about it.
Michael M
2
0
Michael M Entrepreneur
Never Stop Creating!
Anytime you give up equity, regardless of the "norm" ask yourself one question and you will typically get your answer.

Does this person bring value to grow the company by whatever KPI or metric you have determined.

If your growing monetarily, does this advisor offer you the ability to grow internally or externally monetarily and is the equity share needed or wanted.

If you're growing by employees, size, user base, customer base does this advisor afford you that opportunity quicker, faster or by necessity.

Equity is just another form of "paper money" , you have to gauge the NEED for it not so much the want for it IMO.
Kym McNicholas
2
0
Kym McNicholas Entrepreneur
TV Host, Tech Jounalist, Director of Extreme Tech Challenge, Host of KDOW Radio's NewFocus On Innovation
I decided to give the standard 1/4% equity to each advisor. What was cool is that each one of my advisors said they would help me just because they liked me and they believed in me. They said they didn't want equity. But the reason I decided to go ahead with it is because I want a 100% guarantee of a returned phone call. I want each person to feel like my success is their success.
Luis De Avila
0
0
Luis De Avila Entrepreneur
Owner/Fullstack Architect at IdeaNerd LLC
Not really answering your questions but this story might help.

I offered my volunteer advisor equity... the standard .25% - 1%... when he saw what was expected in return, actually helping to grow the business and not just give advice, he quit. Doh!
Artem Boytsov
1
0
Artem Boytsov Entrepreneur
Founder at Stuph
You mean upfront as in without vesting? Never give equity without vesting - everyone should vest, even the founders. Advisors are usually compensated with options on 24 or 36 month vesting schedule with no cliff, in 0.1-1% range, 0.25% being very common. Of course, it depends on the maturity of the company, and the value the advisor brings.
Ben Sweat
0
0
Ben Sweat Entrepreneur
Director, Product at Idealab
I think it is standard. I've always heard .5-3%. I've heard from some the advisors were critical early on for momentum and credibility but I think that fades over time. What I don't know is what kind of terms or vesting goes with that. Sent from my iPhone
Daniel Caplin
0
0
Daniel Caplin Entrepreneur • Advisor
Vice President of Services at WhatCounts
I recommend having the equity vest. IE- shares are allocated to them, but they are distributed over time and there are specific deliverables that they do over time that releases the shares to them. Then everyone is protected as well as encouraged to support the goals of the venture. Daniel Caplin ph. [removed to protect privacy] [removed to protect privacy] danielcaplin.com http://www.linkedin.com/in/danielcaplin/ LEGAL DISCLAIMER The information contained in this e-mail is for the exclusive use of the intended recipient(s) and may be confidential, proprietary, and/or legally privileged. Inadvertent disclosure of this message does not constitute a waiver of any privilege. If you receive this message in error, please do not directly or indirectly use, print, copy, forward, or disclose any part of this message. Please also delete this e-mail and all copies and notify the sender. Thank you.
Nick Allen
0
0
Nick Allen Entrepreneur
Entrepreneur and Investor
it's standard, but make the equity subject to vesting like any other employee. you don't want to give a point and not get your money's worth.
Join FounderDating to participate in the discussion
Nothing gets posted to LinkedIn and your information will not be shared.

Just a few more details please.

DO: Start a discussion, share a resource, or ask a question related to entrepreneurship.
DON'T: Post about prohibited topics such as recruiting, cofounder wanted, check out my product
or feedback on the FD site (you can send this to us directly info@founderdating.com).
See the Community Code of Conduct for more details.

Title

Give your question or discussion topic a great title, make it catchy and succinct.

Details

Make sure what you're about to say is specific and relevant - you'll get better responses.

Topics

Tag your discussion so you get more relevant responses.

Question goes here

1,300 Followers

  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
  • Name
    Details
Know someone who should answer this question? Enter their email below
Stay current and follow these discussion topics?