What is Advisory Shares?
Advisory Shares
Advisory Shares are stock options granted to startup advisors and mentors in exchange for strategic advice, industry introductions, and expertise.
Why It Matters for Startups
Governs the legal rights and ownership distribution of the entity; configuring Advisory Shares is critical for managing long-term cap table health and alignment during advisor recruitment and equity allocation.
Detailed Deep Dive
Advisory Shares compensate external advisors for their strategic contributions. Typically granted as options from the ESOP pool, advisor equity vests over 2 years to align incentives with startup growth.
Frequently Asked Questions
Q:What is the typical equity grant size for an advisor?
Usually 0.1% to 1.0% of the company's equity, depending on the advisor's profile and level of involvement.
Q:Do advisory shares have vesting?
Yes, they typically vest monthly over 2 years, often featuring a single-trigger acceleration upon acquisition.
Quick Facts
- CategoryLegal
- Key ApplicationAdvisor recruitment and equity allocation
Coverage Trend12 Weeks
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