Startup Helpers

conversations from the groupchat. by @usehaven

[Startup Helpers @startuphelpers0]

@joshcons0 @adhoc97 cheffery

[Startup Helpers @startuphelpers0]

Here’s a summary of today’s discussion on advisory shares from the WhatsApp group:

1) Skepticism Toward Advisory Shares

@adhoc97: He mentioned that giving someone shares doesn't necessarily increase their incentive enough long term—they might stay engaged for two weeks, then stop being helpful​.

2) Preferred Alternative: Get Advisors to Invest Instead

@MasoudByDesign: If an advisor really wants to help, they should be willing to invest money in the company. Advice is abundant and free, so equity should go to those providing true strategic value​.

@M___Morgenstern: Advice is free these days. Get them to angel. (i.e., push advisors to invest instead of just taking equity)​.

3) Vesting and Cliff Structures

@PeterDaggett : A one-year cliff is the best way to structure advisory shares since most advisors overpromise and underdeliver​.

@aaronShaki & others: Some advisors may push for a six-month cliff, but the group consensus was that one year is better for weeding out ineffective advisors​.

VC & Founder: A milestone-based cliff (instead of just time-based) might be more functional, but some lawyers advise against it because it’s harder to enforce legally​.

4) Performance-Based Equity Allocation

@theSpencerFoust: He only accepted advisory shares after proving value (i.e., helping close customers first). If an advisor isn't excited enough to help before getting shares, giving them equity just creates messy expectations​.

5) Founder Institute’s FAST Agreement

VC: Recommended using the Founder Institute’s FAST Agreement, which functions like a SAFE for advisors and includes standard equity allocations based on involvement and company stage.

The majority agreed that advisory shares should be given very selectively. The best advisors either invest in the company or prove their value first before getting equity.