Turn an informal advisor deal into a clear equity agreement

The trouble is usually not the idea of giving equity to an advisor. It is the missing detail around what the advisor is actually expected to do, when the equity is earned, and what happens if the relationship fades out after a few calls or introductions. Founders can end up with competing views about milestones, vesting or whether the advisor was acting personally or through another business. A written agreement helps record those points while the deal is still fresh, which is often far easier than trying to reconstruct the arrangement later during investment or due diligence.

It will commonly set out the advisor's role, the services or support expected, the amount and type of equity or options being offered, vesting over time or by milestones, confidentiality obligations, intellectual property treatment and what happens if the arrangement ends early. Some startups also want restrictions around use of the company name, public statements or return of confidential materials. The exact drafting depends on the commercial arrangement you have actually reached. If the grant needs to fit within wider share scheme or constitutional documents, additional paperwork may also be needed.

Useful details include who the advisor is, whether they are advising personally or through a company, what contribution they are expected to make, how long the arrangement is meant to last, and whether vesting is time-based, milestone-based or a mix of both. It also helps to know whether the startup wants the advisor to sign confidentiality or IP terms that match existing founder, contractor or employee documents. The clearer those points are at the start, the easier it is to produce an agreement that reflects the real commercial deal rather than a generic equity form.

A template can be a helpful checklist, but it often leaves the commercially sensitive points unresolved. Advisor arrangements vary a lot, especially where the advisor is expected to make introductions, support fundraising, contribute strategy or help shape product direction over a limited period. A generic form may not align with your cap table, your existing documents or the way vesting is meant to work in practice. Bespoke drafting is often worth it where even a small percentage could become significant later, or where the startup wants cleaner records for future investor review.

Timing usually depends on whether the commercial points are already settled. If you know the advisor's role, the equity amount, the vesting structure and any special conditions, the first draft can usually be prepared more quickly. Matters often slow down when milestones are still being negotiated or when the startup has not yet decided how the equity will be delivered. After the draft is prepared, the next step is to review the wording and use the revision round to tighten points such as vesting triggers, termination treatment or confidentiality obligations.

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