The ecosystem of inviting advisors into your cap table in exchange for equity is a well-established and common one. This is something Eric has done often over his career.

You can consider cash or profit share. But Eric believes that equity is better because it aligns everyone onto the long-term success of your business.  

The most important thing with these agreements is understanding what “work” will be delivered if they join as a startup advisor. Or what milestones they will help achieve by being part of your team.

We often see advisor relationships last between six months to two years. In exchange, they receive some fraction of a percent in equity. But we recommend you do your own research on what’s best for your situation.

If you’re starting a B2B SaaS company and Mark Benioff (founder of Salesforce) wants to advise you but only for a huge % of the company, it might be worth it. Mark has a lot of credibility and relationships that would accelerate your business.

But in most cases, you might not be so lucky.

So Katrina, we recommend being explicit on the expectations before you say yes to a startup advisor. What milestones will they help achieve? What will be delivered and by when?

On Google, you can find some standard advisor contracts that you can use as inspiration. We hope you gave you a starting place on where to explore.