Advisor equity norms

1. The core idea#

4.11 covers the advisor agreement itself: the FAST template, scope, vesting, IP assignment and how to size a single grant. This playbook covers the norms around it over the life of the company: how much equity all your advisors should get in total, how scientific advisory boards and independent directors differ from ordinary advisors, when to pay cash instead, and what to do when an advisor's role changes.

Who this is for: a founder who already has, or is about to add, a second or third advisor, a scientific advisory board (SAB), or a first independent director, and wants the whole picture to make sense to investors.

The norms in one paragraph. Individual advisor grants are small and shrinking: a median of about 0.24% at pre-seed, about 0.12% at seed and about 0.05% at Series A in Carta's US data. Deeptech advisors get somewhat more because the expertise is scarcer. Board members get several times more than advisors because they carry legal duties. Keep all advisor equity together to about 1–2% before seed, take it from the option pool, vest it over two years, and review every advisor once a year. Pay cash, not equity, for defined project work.

Related: 4.11 (advisor agreements), 2.12 (professor as co-founder, advisor or CSO), 20.04 (scientific and technical advisory boards), 5.01 (pool sizing), 5.15 (phantom stock for people who cannot hold options).

2. What the data says (November 2026)#

Individual advisor grants (Carta, US)

• The 2025 pre-seed median was 0.24%. About 64% of pre-seed advisors received under 0.3%, and only about one in ten reached 1% (Carta, January 2026).
• Medians have drifted down over several years: from about 0.275% to 0.225% at preseed and from 0.165% to 0.129% at seed in Carta's comparison.
• Deeptech is higher. Carta's data showed biotech advisors at a 0.29% pre-seed median against 0.20% for SaaS, and it notes that life sciences and technical hardware see larger advisor grants at early stages.
• Most companies have few advisors. The median pre-priced-round startup on Carta has one advisor, and a growing share have none.
• The FAST template's grid (0.25%–1.00% at idea stage) sits above actual practice; treat it as a ceiling (4.11).

Board members get much more than advisors#

Carta's 2023 data put the median seed-stage board member grant at about 0.5% (average 0.75%), falling to an average of 0.52% at Series A and 0.38% at Series B. The difference reflects the legal duties and time a director takes on. Only around a third of startups have an independent director by Series A; the median company adds its first after the second financing round (Ewens and Malenko, ECGI/NBER).

Cash is common later and for scientific advisory boards#

Data on SAB pay is thin and mostly anecdotal. Practitioner guides in 2025–2026 describe equity-only as standard at the earliest stages, hybrids (a smaller grant plus a fee per meeting) as common, and cash retainers or per-meeting fees as more usual once a company has raised a Series A. Per-meeting fees quoted range from a few hundred dollars at early startups to $1,000–$3,000 for experienced advisors. Treat these as ranges to discuss, not norms.

Total advisory equity#

Guides vary: some say under 1–2% for the whole advisory group, others allow up to 5%. The Founder Institute's 5% pool guidance is much higher than current practice. For a preseed deeptech company with two or three advisors at Carta-median grants, the total is usually 0.5–1.5%.

What this means#

• Anchor on Carta medians, not the FAST grid.
• Expect to pay deeptech advisors with rare technical judgment somewhat more than software advisors.
• An independent director is a different role and gets a different grant, typically several times an advisor's.
• After Series A, a cash fee is often a better fit than equity for scientific advisors.

3. How to do it: managing advisor equity over time#

Step 1. Set an advisory budget inside the option pool#

Decide a cap for all advisor and SAB equity together, and take it from the pool (5.01). A reasonable default for a deeptech company: no more than about 1.5% before seed and about 2% in total by Series A, excluding independent directors. Write it down. It makes the conversation with each new advisor easier ("this is our budget") and gives investors a number.

Step 2. Classify the role before you size it#

Step 3. Size within ranges#

These ranges combine the Carta data in section 2 with deeptech practice. They are a starting point, not a rule.

Move towards the top of a range for rare technical expertise, real time commitment or a likely contribution to inventions. Move to the bottom, or to cash, for introductions or occasional calls.

Step 4. Pay cash for project work#

If an advisor is going to run experiments, review a regulatory filing or spend several days on a design review, pay a day rate under a consulting agreement (4.10). Equity is for ongoing judgment and commitment, not for billable work.

Step 5. Review every advisor once a year#

At each anniversary, ask: what did we ask for, what happened? End agreements that have gone quiet (unvested equity returns to the pool), and remove inactive names from your deck. At the end of the two-year vesting period, decide whether to renew with a smaller grant, convert to a fee, or end with thanks.

Step 6. Handle role changes cleanly#

• Advisor becomes an employee: end the advisor agreement, keep what has vested, and make a normal employee grant at their level (5.04). Do not let the two grants stack without a decision.

• Advisor joins the board: replace the remaining advisor vesting with a director grant, or let the advisor grant finish and make a smaller director top-up.
• University advisor: check their institution's conflict-of-interest rules before you agree terms. Many universities require disclosure of equity in companies that sponsor research in the advisor's lab, and some cap it (2.12, 2.14).

Worked example#

A quantum sensing startup in Bengaluru with a Delaware parent (4.03) has a 12% option pool. At pre-seed it has one advisor, a professor at an Indian institute. At seed it wants a three-person SAB and its first independent director.

Advisor and SAB equity totals 0.77%, inside the 1.5% budget, and the director's 0.5% is shown separately so investors can see both. After Series A, the company moves SAB members to a small grant plus a per-meeting fee. At the first annual review Ms B has made one introduction in a year; the founders end her agreement with about half her grant vested, and the rest returns to the pool.

4. Country notes#

India#

• Advisors cannot hold ESOPs in an Indian company unless they are employees or (non-independent) directors. The usual alternatives are phantom stock or SARs under a contract (5.15), a small allotment of shares at fair value, or options in a foreign parent if you have flipped (4.03, 4.11).
• Shares at fair value need a valuation and a private placement or preferential allotment process under the Companies Act. Since the angel tax provision (section 56(2)(viib) of the old Income-tax Act) was abolished from the 2025–26 tax year, issuing shares to a resident above fair value no longer triggers that tax, but the share price still needs a valuation report.

• Independent directors of an Indian company cannot receive ESOPs. They can be paid sitting fees (capped at ₹1 lakh per meeting under the Companies Act rules) and, in some cases, commission on profits, which early startups rarely have. In a flipped structure, independent directors on the parent's board can receive parent options.

• Foreign advisors paid in cash by an Indian company: check withholding tax and treaty rules, and the bank's documentation for the remittance (4.19).

United States#

• Advisors and non-employee directors receive NSOs, not ISOs, or restricted stock. For restricted stock, an 83(b) election within 30 days of grant usually makes sense when the value is low (5.08).
• Rule 701 covers grants to consultants and advisors who are natural persons providing genuine services, within its limits. Grants to an advisor's company rather than to the individual need a different exemption.
• Set the exercise price at the 409A value (5.07) and give advisors a long posttermination exercise window, because their relationship is expected to end (5.09).

United Kingdom#

• EMI options are only for employees meeting the working-time test, so advisors and non-executive directors get unapproved options or growth shares (4.11, 5.15).
• Agree a share valuation with HMRC where possible, and be aware that gains on unapproved options are taxed as employment income at exercise for employees and directors.

University-employed advisors everywhere#

Academic advisors often need permission from their employer, may have to disclose equity, and may face limits if your company funds research in their lab. In India, check the institution's consultancy and startup policy; in the US and UK, the university's conflict-ofinterest policy. Put the permission in writing before you sign (2.12, 2.14).

5. Scripts, mistakes and sources#

Scripts#

Explaining your advisory budget

"We keep all advisor and SAB equity together under 1.5% before our seed round, and it comes out of the option pool. Within that, we're offering you 0.12%, vesting monthly over two years. That's in line with Carta's median for seed-stage advisors, and a bit above it because of the depth of what you'd bring."

Inviting someone onto a scientific advisory board

"We'd like you on our SAB. That's two half-day meetings a year to review our technical plan and data, plus occasional calls with our CSO. We're offering 0.12% vesting over two years now; once we've raised our Series A we'll add a fee for each meeting."

Moving an advisor to cash

"The work you're doing on the regulatory submission is more like a project than ongoing advice, so we'd like to pay you a day rate for it. Your existing grant keeps vesting as agreed."

Ending an inactive advisory relationship

"Thank you for your help over the past year. Our priorities have moved on, so we'd like to end the advisory agreement at the end of this month. The options that have vested are yours to keep."

Common mistakes#

1. Using the FAST grid as the market. Actual grants are well below it.
2. No total budget. Five reasonable grants can add up to an unreasonable total.
3. Treating an independent director like an advisor. The role, duties and grant are different.
4. Equity for project work. Pay a day rate; keep equity for long-term judgment.
5. Never reviewing advisors. Inactive advisors on a deck worry investors, and their unvested equity should return to the pool.
6. Stacking grants when roles change. Decide explicitly what happens to the old grant when an advisor joins the team or the board.
7. Ignoring the advisor's employer. University and corporate conflict-of-interest rules can make a grant awkward or invalid.
8. Trying to give an Indian ESOP to an advisor. It is not allowed; use one of the alternatives.

Related playbooks#

• 4.11 Advisor agreements (FAST template)
• 4.10 Contractor and consultant agreements
• 2.12 Professor as co-founder, advisor or CSO: designing the role
• 2.14 Using university labs after spinout; sponsored research agreements
• 20.04 Scientific and technical advisory boards
• 5.01 Sizing the ESOP pool at each stage; 5.04 Allocating equity by level
• 5.07 Setting the strike price; 5.08 ESOP tax; 5.09 Exercise windows
• 5.15 Alternatives to options: phantom stock, SARs, RSUs

Sources#

• Carta (Peter Walker), advisor equity benchmarks: Pre-seed advisors receive a median 0.24 percent equity (January 2026); Startup advisors are receiving less equity over time ; Advisor equity benchmarks from 47,000 grants ; biotech vs SaaS advisor medians (2024)
• Carta, How much equity do startup board members receive (2023)
• Ewens and Malenko, Board dynamics over the startup life cycle (ECGI/NBER), as summarised by Stealth Agents (2026)
• Founder Institute, FAST agreement (version 2)
• Angel Investors Network, Compensation for board advisors: what startups pay in 2025 ; Toptal, Advisory boards (June 2026); GrowthMentor, Startup advisor compensation (January 2026)

This playbook is general information, not legal or tax advice.