A founder gave a well-connected industry contact two percent of the company in exchange for "strategic advice and introductions." They signed a one-page agreement that said nothing specific about deliverables, timeline, or vesting. Two years later, that contact had attended exactly one phone call, made zero introductions, and owned 2% of a company valued at $8M.
The problem wasn't the advisor. It was the startup advisor agreement.
Most advisor relationships that quietly stop working after three months share a common root cause: the agreement that launched them was built on optimism rather than accountability. Both parties assumed the other understood what success looked like. Neither wrote it down.
What a startup advisor agreement actually covers
An advisor agreement is not a handshake arrangement — it's a contract that defines the scope of the relationship in both directions. The founder agrees to provide information, access, and equity. The advisor agrees to provide specific contributions. Both parties should know exactly what success looks like before anyone signs.
A well-structured startup advisor agreement covers four things: what the advisor will actually do (specific and time-bound), what equity they receive and on what schedule, what information they have access to and what confidentiality they accept, and what happens if either party wants to end the relationship early.
Most advisor agreements founders pull from the internet cover the equity mechanics and nothing else. That's the foundation of every advisor relationship that goes nowhere.
The equity question: how much and on what terms
Advisor equity at the seed stage typically ranges from 0.1% to 0.5%, with the amount depending on the advisor's contribution level, the company's stage, and the advisor's opportunity cost. The FAST Agreement (Founder/Advisor Standard Template from Founder Institute) is the most widely used standard — it defines three advisory levels with corresponding equity ranges and is recognized by most startup attorneys and experienced advisors.
The most common mistake at the seed stage is overcompensating advisors relative to what they'll actually deliver. Giving 1% or more to someone who is a domain expert or a warm introducer is generous in a way that will feel expensive by Series A. That equity comes out of the founders' stake and dilutes everyone at every future raise.
Advisor equity should vest over two years with a six-month cliff — shorter than founder vesting because advisor relationships are shorter by nature. If the relationship isn't working in six months, neither party should be locked in. Advisors should receive options, not restricted stock, to keep the cap table clean and create the right tax treatment for both parties.
The scope clause is where most advisor agreements fail
The single most useful thing you can put in a startup advisor agreement is a specific scope of work — and it's the thing most agreements leave vague.
"Strategic advice and introductions" is not a scope. A scope reads like: quarterly 90-minute strategy sessions focused on enterprise sales process; targeted introductions to three named companies per quarter, to be agreed at the start of each quarter; availability for reference calls with investors during fundraises; review of major pitch materials before investor presentations.
When you define scope this way, two things happen. First, you know whether the relationship is working, because you have a standard to measure against. Second, the advisor knows what's expected, which means they're more likely to deliver. Vague commitments produce vague results — and vague results don't justify the equity you're giving up.
If an advisor is uncomfortable committing to specific deliverables in writing, that tells you something important about what the relationship will actually produce.
When to use the FAST agreement and when to write your own
The FAST Agreement is the right starting point for most seed-stage advisor relationships because it's standard enough that any startup attorney and experienced advisor will recognize it immediately. Using a non-standard agreement adds friction to the negotiation without adding meaningful protection.
The FAST Agreement becomes insufficient when the advisor relationship is complex: a domain expert who is also a potential future executive, a board observer with specific information rights, or an advisor contributing intellectual property. In those cases, a custom agreement with startup counsel is worth the cost.
For most advisor relationships at the seed stage, the FAST Agreement plus a custom scope appendix is the right structure. Simple enough to execute in a week, specific enough to hold both parties accountable. Put it in place before the advisor starts contributing — retroactive agreements are messier and give the advisor unnecessary leverage.
The best advisor relationships are the ones where both parties know exactly what success looks like — and can have an honest conversation when it's not happening. The equity structure matters, but it's the agreement governing the relationship that determines whether the equity was worth paying.
If you're building at the pre-seed or seed stage and trying to structure your advisory relationships, bring it up when we talk. Tell us about your company.