Advisor equity
Equity granted to advisors providing strategic guidance to the LLC.
Definition
Advisor equity is the equity granted to advisors providing strategic guidance. Typical range: 0.25-1% over 2 years of advisory. FAST (Founders Advisor Standard Template) by Founder Institute provides standardized advisor agreements.
Context
Common in early-stage LLCs and startups.
Example
A Delaware LLC startup grants a domain-expert advisor 0.5% equity vesting over 2 years monthly in exchange for 4 hours/month of advisory time.
Common pitfalls
- Advisor equity grants need Operating Agreement amendment for LLCs.
- Tax implications for both LLC and advisor.
- Document advisor-services scope clearly.