What is Advisory shares? Definition, Formula & Benchmarks

What is advisory shares?

Advisory shares are equity you grant to an advisor in exchange for guidance rather than cash. They're usually small, a fraction of a percent up to around 1%, granted as non-qualified options or restricted stock, and subject to a short vesting schedule so the advisor earns the equity over time rather than all at once.

Worked example

You give a well-connected industry advisor 0.25% in NSOs vesting monthly over two years with no cliff, using a standard FAST agreement.

Why it matters for fast-growing companies

Advisory equity is cheap to promise and easy to over-promise, five advisors at 1% each is 5% of your company gone before employees. Keep grants small, always tie them to vesting so an inactive advisor stops earning, and document exactly what the advisor will do. Loose advisor grants clutter the cap table for years.

Frequently asked questions

How much equity do advisors usually get?+

Advisory grants are typically small, often between roughly 0.1% and 1%, depending on the advisor's involvement and your stage. A big-name advisor engaged deeply at pre-seed sits at the higher end; an occasional sounding board sits lower. Frameworks like the FAST agreement offer standard ranges so you're not negotiating from scratch.

Should advisory shares vest?+

Yes, almost always. Vesting (commonly monthly over one to two years, often with no cliff) protects you if the advisor disengages. Without vesting, an advisor who ghosts after a month keeps their full grant. Tie the equity to continued involvement so it reflects value the advisor actually delivers.

Advisory shares