Founders - don't feel pressured to give your startup advisors hefty equity packages.
A few of them are worth every percentage point of equity. But I've heard multiple times this week of advisors requesting 1%, 1.5%, or 2% of company equity from pre-seed founding teams.
This is pretty far from market.
𝗖𝘂𝗿𝗿𝗲𝗻𝘁 𝗕𝗲𝗻𝗰𝗵𝗺𝗮𝗿𝗸𝘀
𝗣𝗿𝗲-𝗦𝗲𝗲𝗱 Median Advisor Equity Grant: 0.23% Avg: 0.42% 90th percentile: 1%
𝗦𝗲𝗲𝗱 Median: 0.1% Average: 0.21% 90th pct: 0.5%
𝗦𝗲𝗿𝗶𝗲𝘀 𝗔 Median: 0.07% Average: 0.16% 90th pct: 0.30%
Again, I'm sure there are outlier situations in which very large advisor grants work out great. But for most companies, grants far above the median will turn out to be wasted equity. For reference, the median grant for the first hire is 1% - and they are full-time!
The more you know 🙏
Headed to Italy for the next few weeks so posting may be spotty! Hit me with your best Tuscany recommendations in the comments if you have any.
#cartadata #advisors #equity #founders #startups
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