Advisory shares, also known as advisor equity or advisor stock, are equity grants given to individuals who serve as advisors to a company. Unlike traditional employees, advisors are typically not full-time team members but offer their specialized knowledge and guidance to the company on a part-time or intermittent basis.
What is a startup advisory share?
The advisors given advisory shares are usually business professionals who are former founders or senior executives in the same operating industry as the startup. The advisors provide insight and connections in exchange for equity in the startup. Like anything startup related, founders need to exercise caution.
How do I start a startup with advisory shares?
Here are the key steps to consider: Determine the Advisory Share Pool: Decide on the percentage or number of shares that will be allocated to advisory shares. Consider the size of the total equity pool and the expected contributions and value the advisors will bring to the startup.
