Advisor

An advisor is an outside expert who provides part-time strategic guidance, introductions, or domain expertise to a startup in exchange for equity. The relationship is formalized in a short advisor agreement and distinct from board members (advisors have no fiduciary duty and no voting power), from investors (advisors are not buying equity), and from consultants (advisors are ongoing relationships paid in equity, not project work paid in cash). The role is the most common way founders extend their leadership reach in the first three to four years of a company.

The categories that matter: technical advisors (a senior engineer or domain expert who reviews architecture decisions or vouches for the founders to investors, typically 1 to 4 hours per month), commercial advisors (a former operator or industry executive who makes warm introductions to customers and recruits, typically 2 to 8 hours per month), fundraising advisors (an investor or former founder who helps with investor introductions and pitch refinement, especially valuable before the first institutional round), and named board advisors sometimes called a "Board of Advisors" (a formalized group of 3 to 8 advisors who meet quarterly, used both for substantive advice and for the credibility their names bring to the company's pitch). Compensation is almost always equity: typical grants of 0.1 to 1 percent of fully diluted shares per advisor, sized using the Founders Institute's FAST agreement (Founder Advisor Standard Template), vesting monthly over 24 months with no cliff. The structure reflects the relationship: advisors should contribute immediately (no cliff), the engagement should be revisitable (24 months is a natural review point), and the equity should be earned in arrears rather than granted upfront. The relationship should always be formalized in writing, even between friends, because verbal expectations drift and the equity allocation gets contested at the worst moments (next financing round, exit diligence). Real examples: nearly every YC-backed company at Demo Day has 2 to 5 advisors listed; Marc Andreessen advised at Twitter pre-IPO; Reid Hoffman has been an advisor to companies before joining their boards.

What founders get wrong: Granting advisor equity before the relationship has produced anything specific. Equity is a settlement on past contribution, not a prepayment for hoped-for future help. A two- or three-month unpaid trial period before signing the advisor agreement and granting any shares is the simplest filter against decorative advisors and the cleanest way to surface the actual operators.

Related: Advisor Shares · Board of Directors · Founders Agreement · Warm Intro

FAQ

What is the difference between an advisor and a board member?
An advisor provides part-time guidance with no fiduciary duty and no voting power. A board member has fiduciary duty to the company and votes on company decisions. Advisors are paid in equity grants from the option pool; board members are usually paid in cash retainers plus equity, and joining the board carries real legal responsibilities.

How much equity does an advisor get?
Typically 0.1 to 1 percent of fully diluted shares per advisor, sized using the Founders Institute's FAST agreement and indexed by company stage and the advisor's level of engagement. See Advisor Shares for sizing detail and vesting structure.

Do startups need advisors?
Most early-stage startups benefit from 1 to 3 active advisors who provide specific introductions or domain expertise the founders cannot self-serve. The "do we need advisors" question is the wrong frame; the right frame is "what specific gap in our knowledge or network does this advisor close."

When should an advisor relationship end?
When the contributions stop or the advisor stops responding. Most advisor agreements include a clean termination clause and 24-month vesting (no cliff) so the relationship can wind down without drama. Founders should treat the 24-month vest end as a natural review point.