Renting Your Reputation
An Advisory Board role is a different product than a consulting engagement. Startups do not recruit advisors because they need more coding hours — they recruit advisors because they need credibility, network access, and the occasional sanity check from someone who has been there before.
When a seed-stage startup puts "Former Principal Engineer at Google" on their pitch deck, they are borrowing your reputation to reduce investor risk perception. That is a real, quantifiable service. It should be compensated accordingly.
What You Provide as an Advisor:
- Credibility: Your name and title on the pitch deck, website, and investor materials. This directly affects their ability to raise money.
- Network: Introductions to relevant VCs, potential first hires, or enterprise customers. A single warm intro to the right investor can be worth millions.
- Strategic Guidance: Quarterly or monthly calls to review the technical roadmap, challenge assumptions, and flag risks the founding team is too close to see.
What You Receive — The FAST Agreement:
Advisors are almost never paid in cash at the early stage. Compensation is in equity — a small ownership stake in the company.
- Standard Range: 0.1% to 0.5% of the company, depending on stage and commitment level.
- Vesting Schedule: Typically 2 years with no cliff (monthly vesting from day one), since advisor relationships are ongoing rather than project-based.
- The FAST Framework: The Founder / Advisor Standard Template (FAST), created by the Founder Institute, is the industry-standard agreement for advisor equity. Do not pay a lawyer to draft a custom agreement for a standard advisory role — use FAST. It is widely recognized by investors and founders, and it covers the key terms: equity amount, vesting, IP ownership, and termination.
The Critical Distinction — Advice vs. Labor:
Pure advisory equity (0.1%–0.25%) is appropriate when you are providing strategic guidance: calls, reviews, intros. The moment a startup asks you to write code, lead hiring, or manage a team — that is labor, not advice. Labor should be compensated with cash plus equity, not equity alone. Confusing these two categories is the most common mistake advisors make, and it leads to resentment on both sides.
A common Staff+ interview question is: "How would you evaluate whether to join a startup's advisory board?" The answer should cover four dimensions: (1) Is the equity meaningful given their stage and valuation? (2) Is the time commitment clearly defined and capped? (3) Does the FAST agreement protect your IP and limit your liability? (4) Is there a reputational risk if the company fails publicly? Interviewers want to see that you treat advisory roles as business decisions, not flattery.