Advisor shares are equity awards reserved for individuals who advise the company part-time—typically common stock or stock options with a short vesting period.

How it works

Founders sign advisor agreements listing expected hours, introductions, or functional help (recruiting, fundraising prep, regulatory navigation). Grants often range from 0.05% to 1% depending on stage and advisor stature, vesting monthly over 12–24 months with no cliff or a three-month cliff. Some use NSOs with strike at fair market value per the latest 409A.

Boards approve grants like employee options. Cap table tools track advisor pools separately from the employee option pool. Acceleration on change of control is uncommon unless negotiated.

Why it matters

• Founders: Standardize a advisor equity band so every famous name does not get a bespoke 2% slice. Tie vesting to advisor vesting milestones.
• Investors: Cap table diligence flags duplicate advisors and expired agreements still holding uncanceled shares.
• Advisors: Tax treatment follows option vs stock rules; consult a CPA before exercising early.

Common mistake

Granting full advisor shares upfront for a verbal promise to “help with fundraising.” If they disappear, you have no clawback unless vesting was enforced.

Related ideas

Advisor vesting, advisory board roles, and employee option pool sizing.