Y Combinator Advisor Agreement

With a single signature and a box to coerc on the FAST agreement, entrepreneurs and consultants can agree in a few minutes on how to work together, what to accomplish and the correct level of equity compensation. Us Startups For U.S. startups, the Founder Institute offers some instructions on numbers, as well as a free presentation agreement to avoid the formal framework of the relationship quickly and without legal headaches. You can read your instructions and access the American model here. Few mentors and advisors are willing to enter into contracts that require time and attention because they do not fully understand the commitment required. The economy, particularly the venture capital industry, was aware of this problem, but until recently no one had a concrete solution. Entrepreneurs generally do not pay their advisors directly with cash and generally rely on equity to encourage them. They must determine the amount of equity they should offer in exchange for advice and tutoring. This whole process can be complicated and overwhelming. In fact, mentors and advisors are known to withdraw completely from the agreement if a legal agreement is too confusing and intimidating.

To learn more about working with consultants, consult the Board of Directors and advisors. You can also visit articles protecting your company`s intellectual property and protecting it. The agreement is flexible and both parties can opt out if the situation is not right for them. The FAST document is freely available online, so you can study it before using it. I started with FAST and the form saved me hours, money and stress. Plus, it helped me ensure a handful of relationships. Founders before giving equity to an advisor, decide if it`s worth it. If you generate income, can you afford to pay for it instead? If you can`t afford it, a capital agreement could be the beginning of a useful partnership. First-class companies can check Carta Launch if they need help issuing equity, whether they are consultants, investors or collaborators. Consultant relationships must be motivated. « It`s the founders who advance the frequency of communication, » Clayton says, « they`re the ones who build the agenda and maintain expectations about interacting with that advisor. » RSA appears to have a higher percentage, since they are usually issued shortly after creation, before the fair value of an entity is increased. The earlier a consultant enters a business, the higher the fully diluted amount he or she normally receives.

Here`s a guide to help you figure out how to reach out to consultants and their incentives: if you`re interested in working with dozens of potential mentors and consultants to build your startup, then you should apply for a Local Founder Institute program. You can apply on the link below: Experienced consultants may have an executive they`ve used before – as soon as it`s time to talk about compensation, they can propose a structure with which they are familiar. It`s up to you to determine if it makes sense to your business. If not, you work with your lawyer and advisor to find an agreement that works. If you decide to provide equity, think about the consultant`s expertise and the phase of your business when you find out the amount. Here`s a density plot of NSO and RSA consultants agreements for companies on Carta in 2019, which have raised less than $2 million. Axis X represents the fully diluted percentage of a business. The lines have been standardized, so that it appears that option agreements have been established in the areas described above, but they are not common. The FAST agreement is designed to save time and money to negotiate consulting relationships.