Compensating an Advisor

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How much equity should you give to compensate an advisor?  Should the shares carry any special provisions like anti-dilution or change-of-control acceleration?  What about giving the advisor cash compensation?  Tough questions for a startup founding team that’s doing it for the first time and faced with an advisor they desperately want to bring on board.

The short answer is there is no universally-agreed market rate for advisors.  And if you want a superstar, you’ll need to pay whatever they demand or be forced to go with one of your other options.  But I realize that doesn’t give any guidance so for purposes of this article let’s take superstar advisors out of the equation and just deal with “normal” scenarios.

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