Every early-stage founder eventually has a version of this conversation: someone senior and well-connected wants to advise the company. Their network is real. Their experience is relevant. The ask is some equity.
The question isn’t whether to work with advisors — the right advisor at the right moment can shorten your sales cycle by a year. The question is whether the person in front of you is actually that advisor, and whether the terms reflect what they’re going to do.
What standard startup advisor equity looks like
The FAST Agreement — Founder/Advisor Standard Template, maintained by the Founder Institute — is the closest thing the industry has to a standard for advisor equity. It breaks grants into tiers based on stage and engagement type. At the pre-seed and seed stage, advisors who are strategic — a VP of Sales who’s built the same motion in your target vertical, a former operator in your space with active relationships — typically receive 0.25–0.5%. Advisors who are more reputational than operational receive 0.10–0.25%.
Two-year vesting with a one-year cliff is standard. Four-year vesting without acceleration — the kind you might offer an employee — is not appropriate for an advisor relationship.
When the grant is worth the dilution
Startup advisor equity earns its cost when the advisor is doing two specific things: opening doors you cannot open yourself, and giving you qualified feedback that changes decisions. If an advisor is doing only one of those things inconsistently, the grant is probably too large. If they’re doing both consistently over 12 months, 0.25% was cheap.
The mistake founders make is treating advisor equity as a relationship tool — a way to keep someone engaged, feel less alone, or signal legitimacy to investors. An advisor who is primarily valuable because of their name on your cap table is a different transaction than an advisor who is primarily valuable because of what they do. The former is a marketing expense. Structure it accordingly — a small cash retainer or speaking fee is often cleaner than equity.
What to watch for
Advisors who ask for equity before demonstrating the relationship are a yellow flag. The better pattern: work with someone for 60–90 days, see whether the cadence holds, then formalize the grant. You learn in that window whether you’re getting the engagement level the equity implies.
Watch the cliff structure. A one-year cliff means no equity vests until month 12. If the advisor disengages at month 3 — which happens — you’ve paid nothing. Grant equity without a cliff and the relationship goes cold, you’ve already distributed shares with no corresponding value.
Also watch the total advisor count. Five advisors at 0.25% each is 1.25% of your company before the series A. That’s not catastrophic, but it adds up. Two advisors who show up are worth more than six who don’t.
The conversation to have before you grant anything
Before any grant is issued, the conversation should be explicit: what specific commitments are you making, at what cadence, for what duration? Not “I’ll introduce you to people” but “I will make three introductions in the HVAC software buying cycle per quarter and be available for a 30-minute call bi-weekly.” Specificity separates people who want startup advisor equity from people who want to earn it.
That conversation is uncomfortable for founders who are grateful for interest from credible people. Have it anyway. The discomfort up front costs nothing. Misaligned expectations after a year of inactivity cost dilution you can’t recover.
If you’re building a cap table for a vertical SaaS company and want a second set of eyes on your equity structure, reach out. We help operators think through these structures from day one — before they become problems at the Series A.