Advisor Agreements: Structure, Equity, and Expectations

Most advisor agreements fail not because of legal structure problems but because the underlying expectations were never explicit. The equity vested, the advisor became impossible to reach, and both sides feel vaguely let down. Getting the documentation right is secondary to getting the relationship design right.

That said, the documentation matters. It protects both parties, creates clarity, and professionalizes a relationship that otherwise exists only as a handshake.

The FAST Agreement

The FAST agreement (Founder Advisor Standard Template) was created by the Founder Institute as an open-source template for structuring advisor relationships. It's widely used, recognized by most lawyers and investors, and available for free.

The FAST agreement covers:

• The role of the advisor and the company's expectations
• Equity compensation and vesting schedule
• Intellectual property assignment (advisor's contributions belong to the company)
• Confidentiality provisions
• Termination conditions

Using FAST saves legal costs because it's a known standard — your lawyer doesn't need to draft from scratch, just review. It also signals to advisors that you're running a professional process, which matters for recruiting senior operators.

The template is available in multiple versions based on equity level (Standard, Strategic, Expert) and company stage. The Founder Institute publishes the current versions at founderinstitute.com/fast.

Equity Ranges

Advisor equity is typically structured as a small percentage of the company, granted as an option (not common stock), vesting over 2 years.

The FAST agreement's suggested ranges:

| Advisor Type | Pre-Revenue | Post-Revenue | Post-Series A | |---|---|---|---| | Standard (general mentorship) | 0.25% | 0.15% | 0.10% | | Strategic (domain/industry specific) | 0.50% | 0.35% | 0.25% | | Expert (key technical/market expertise) | 1.00% | 0.75% | 0.50% |

These are starting points, not rules. A highly sought advisor at an early stage might command more; a part-time contributor at a later stage might accept less. What you can't do is grant equity that looks embarrassingly small to someone who's genuinely valuable — they'll notice and the relationship will reflect it.

The question to ask yourself: if this advisor delivers what I expect over two years, is this equity grant an appropriate share of the value they're contributing? If the answer is clearly no, either renegotiate the grant upward or recalibrate your expectations downward.

Vesting Structure

Standard advisor vesting: 2 years, monthly, no cliff.

The no-cliff distinction from employee equity matters. Employee vesting typically has a 1-year cliff because you need to be protected against an employee who leaves in month 3. With an advisor, you're building a relationship and you want them to have some skin in the game from day one — the monthly vesting reflects the ongoing nature of the relationship.

When the relationship ends before the 2-year mark, the advisor retains whatever has vested. If you terminate the relationship at month 8, they keep 8/24ths of the grant. This is standard and reasonable — they did 8 months of work.

What happens to unvested equity if you terminate for cause? Most FAST agreements include provisions that allow unvested equity to be cancelled if the advisor acts against the company's interests (competing directly, breaching confidentiality, etc.). Make sure this language is explicit.

What to Define in Writing Beyond Equity

The most common advisory agreement failures happen when the equity is documented but the working relationship isn't. Consider adding a simple one-page working agreement (or an appendix to the FAST agreement) that covers:

Time commitment. "Approximately 2–3 hours per month" or "available for ad-hoc questions by email, one structured call per quarter." Neither party should be surprised when the other person's expectations don't match.

Scope. What are you asking this advisor to engage with? Business development? Product direction? Investor introductions? Being clear about scope prevents the advisor from feeling responsible for things they don't know about and lets them prepare appropriately.

Confidentiality coverage. The FAST agreement has confidentiality provisions, but it's worth explicitly noting that advisors receive sensitive company information and have an obligation to protect it.

Introduction expectations. If introductions are a primary value driver, name this explicitly. "We expect to make 2–3 introduction requests per month, primarily to [type of customer/investor]." Setting this expectation makes it harder for an advisor to avoid it later.

Review cadence. Build in a 6-month or annual review of the relationship. This creates a natural checkpoint to evaluate whether it's working and a graceful way to discuss changes without it feeling like a confrontation. For founders who want structured advisory relationships without the friction of formal agreements and equity grants — particularly at the earliest stages — an AI advisory board like Founderboard can fill the gap while you're still figuring out which advisors are worth bringing on formally.

How to End an Advisor Relationship That Isn't Working

This is the part most founders avoid, and the avoidance makes everything worse. A relationship that isn't delivering value but has equity attached tends to just quietly die — emails go unanswered, calls are rescheduled indefinitely — which is uncomfortable for everyone and occasionally creates legal ambiguity.

The professional approach: have a direct conversation.

"We've both been busy, and I want to be honest that I don't think I've been making the most of this relationship. Given where the company is now, I'd rather end the formal advisory arrangement on good terms than keep something on paper that isn't active. The equity you've vested is absolutely yours — I just want to be clear we're not going forward with the formal arrangement."

Most advisors respect this more than the slow fade. Some will push back, offer to re-engage, and actually follow through — which is useful to know. Others will appreciate the clarity. Either way, you've handled it professionally.

Document the termination even if it's informal. A short email confirming the agreement has ended, what equity has vested, and that there are no ongoing obligations is enough.

IP Provisions: Why They Matter

The IP assignment in advisor agreements is important and sometimes overlooked. Any work an advisor does in the course of the advisory relationship — advice that shapes your product, introductions that generate IP, specific contributions to strategy — should be assigned to the company.

This matters if the advisor is also working with competitors (which they might be — advisors often advise multiple companies) or if the relationship ends badly. The FAST agreement includes standard IP assignment language. Don't remove it.

One situation to watch: advisors who also consult or do paid work for you alongside the advisory relationship. The equity advisor relationship and the consulting relationship should have separate agreements, or the IP ownership gets complicated.