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Re: [newtech-1] Advisor Compensation

From: user 1.
Sent on: Wednesday, March 13, 2013 1:36 PM

Hello All,

This thread has been very useful. Thanks all for your input.

On[masked]:34, Jill Simeone wrote:

As an advisor to several startups, I can add that I have not seen many advisors compensated with more than 1% stock (unless they are taking on an active operational role as well). 
 
I find the table included in the Docracy Advisor Agreement (below) is a good tool....not a final answer, but it certainly helps frame the metrics of the advisor's contributions.  (The whole document is here:  http://www.docracy.com/263/founder-advisor-standard-template )
 

Advisor Compensation

Based on the below range, the parties agree for an advisor compensation equal to: 0.20%

Advisor Performance Level

  1. Standard
    1. Idea Stage: 0.25%
    2. Startup Stage: 0.20%
    3. Growth Stage: 0.15%
  • Strategic
    1. Idea Stage: 0.50%
    2. Startup Stage: 0.40%
    3. Growth Stage: 0.30%
  • Expert
    1. Idea Stage: 1.00%
    2. Startup Stage: 0.80%
    3. Growth Stage: 0.60%


 
On Tue, Mar 12, 2013 at 3:24 PM, Justin Williams <[address removed]> wrote:
I hardly believe that a few hours per week / month is worth 2% for almost anyone. Save for resurrecting the late, great Jobs to sit on the board. RIP.
Justin

Sent from my iPhone

On Mar 12, 2013, at 1:14 PM, Cristian Sepulveda <[address removed]> wrote:

You must find an advisor that make you feel that 2% for siting in the board is too low for you, in other words, if you do not feel ok giving 2% then he is not a good advisor.

If he lead a sale I will be happy to pay up to 70% of the margin for the first sales (early sales are very important), moving down to something between 10-30% for each sale.

If someone only give you an introduction to a key executive and you have to lead the sale, I should only give him back a big THAX.

Cristian.

El 12/03/[masked]:36, "Klaus Sonnenleiter" <[address removed]> escribió:
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.

--
Kshitij Yadav, PhD.
Udacomm Inc.
New York, NY 10027
(e) [address removed]
(m) [masked]
(o)  [masked]

Udacomm.com
---
It is a beautiful day to make things, people. Let's have some fun....

--
 
 




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