Kshitij,

Commissions are generally used to compensate for sales related activities. So if you have advisor with a sales background who can open the door for your sales people so that they can generate a large sale, they'd expect to receive a small part of the commission you reserve for this sale. But as long as the activity is to give an opinion once a month (or whenever asked) and establish key contacts with people who would otherwise not listen to a startup company, the equity based compensation is the going rate.

Klaus

On Mar 12, 2013, at 2:08 PM, Kshitij wrote:

Hello all,

We have very recently started working with some advisors with domain expertise in our targeted customer markets; their main job other than the usual advising will be to help our company with their contacts.

For those on this list, who are working on start-ups, I wanted to know what kind of compensation are you offering to your advisors. I know the usual compensation, depending on the level of involvement, is 1% (or lesser) of the equity. But, I wanted to know if any of you guys are also offering commission-based compensation for introduction to key clients/customers. If so, what are the typical/fair numbers for this kind of compensation.

Best,

Kshitij

 

PS: I understand that performance-based pay is not always the best when looking for real feedback or advise, but I feel it might be worth it to incentivize the advisors.

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Kshitij Yadav, PhD.
Udacomm Inc.
New York, NY 10027
(e) [address removed]
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Udacomm.com

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