If your pre-seed startup advisor asks for 1% of your company - point them to this chart.
Median equity grant for pre-seed advisors in 2024 is 0.25%.
Only 1 in 10 pre-seed advisors receive 1% or more of fully diluted equity.
𝗗𝗲𝗲𝗽𝗲𝗿 𝗧𝗵𝗼𝘂𝗴𝗵𝘁𝘀
Whoa, a quarter of 1 percent doesn't sound like much. True. But if the median equity grant for the first full-time employee is a little over 1% (which it is), then this advisory grant starts to make more sense.
Top-end advisors are brand-name folks that either carry weight across the tech world or have deep industry expertise that founders can't get anywhere else.
What exactly does an advisors commit to doing for this equity? Unclear, unfortunately. But there are advisors in this group who had performance criteria on their equity - things like "advisor receives x% for introducing founder to 2 new hires".
The more specialized the space, the higher the advisor equity range. Specifically thinking of Biotech, Hardware, and Medical Devices.
Seeing a trend of advisors becoming strategic angels as well - useful move for a founder to build closer ties with a really impactful person.
Many companies have 1-2 advisors. We see very few with a much larger advisory table. Be cautious as those equity grants can add up quickly.
May 2024 be a year of great advice.
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