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Create Advisor Agreements

Protect valuable relationships with advisors and mentors.
Use our template to quickly create a customised Advisor Agreement and reward your advisors with cash, equity or a combination of the two.

Advisor Agreement

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    Built by legal experts

    Protect your advisors and mentors

    Startups and small businesses thrive with the right advisors. Create Advisor Agreements to set out their responsibilities and rights, as well as what they can expect in return from you.

    • tickPay advisors in cash, equity or both
    • tickCreate vesting schedules
    • tickAvoid potential disputes
    • tickProtect your business with confidentiality clauses
    Advisor Agreement Document
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    FAQs - Advisor Agreements

    • What is an advisor?

      An advisor is a professional with industry or business expertise that’s relevant to your company. They provide specialist advice – and in some cases, networking contacts and opportunities – to help your business succeed.

      There are different types of business advisor - these are the most common:

      • Board Advisor
        Offer strategic direction, sit on the Board of Directors

      • Technology Advisor
        Implement best tech practices, shape the longer-term tech vision

      • General Advisors
        Strategic, not on the Board of Directors

      Advisors have often launched new businesses of their own in the past, or helped others to do so. They might provide advice about how to raise funding or scale activities up, or bring a deep understanding of the industry or market you’re planning to operate in. They may provide ideas or suggestions, make useful introductions, or be a sounding board for the Directors.

      They’re not contractors or freelancers, and their work for you isn’t as clearly defined as simply providing a tangible service in return for payment.

      Depending on who is advising you, you might agree to pay them in cash, equity or a combination of the two. It’s more common to give equity to advisors.

      When you’re starting a new company, tapping into the knowledge and experience of expert advisors and mentors can be invaluable. And just as with employees, freelancers and consultants, it’s important to make sure you both agree to terms written in a contract (in this case, an Advisor Agreement) so you know what to expect from the other party.

      Read more: Advisor Agreements: Shares, equity and vesting for mentors and advisors
    • What is an Advisor Agreement?

      An Advisor Agreement formalises the relationship between your company and an advisor, setting out how you’ll work together and what they will bring to your business.

      The contract details the obligations on both sides. The advisor agrees to give advice and to treat any information they acquire in the role as confidential.

      The Agreement also sets out what the advisor will receive as payment for their services. A SeedLegals Advisor Agreement lets you pay your advisors in cash, equity or a combination of both.

      An Advisor Agreement makes it clear that the relationship between two parties is independent, and the advisor isn’t eligible for the company benefits you give employees.
    • When should I use an Advisor Agreement?

      If you have advisors or mentors providing advice and sharing their expertise with you to help your business grow and expand, then you should create Advisor Agreements for them, and sign and store the documents.

      If your arrangement is more informal, you should still make sure your advisor or mentor signs an NDA.

      Some companies have a Board of Advisors who provide strategic advice. For this type of advisor, you’ll need an Advisor Agreement.
    • How do I write an Advisor Agreement?

      The easiest way to create Advisor Agreements is to use a template and customise it so it’s exactly what you need.

      You can start with a SeedLegals Advisor Agreement template and choose which terms you need. To get started, log into SeedLegals then go to Agreements. It’s fast and incredibly simple. If you need any help, chat online with our experts.

      When your document is ready, send it via SeedLegals to be signed online.

      Best of all, we store your documents securely for as long as you need, so you can access them in My Documents anytime. And if you need to create a new Advisor Agreement in the future, you can replicate the terms you’ve used before – you don’t have to start from scratch.
    • What should I include in an Advisor Agreement?

      • what advice or service they’ll provide

      • how long they’ll provide the advice or service

      • what you’ll pay them

      • how they’ll be paid
        If you choose to pay your advisors with equity, you’ll also want to attach a vesting schedule to the equity allocation.

      • confidentiality clauses

      • how the relationship can be terminated
    • What is a vesting schedule?

      A vesting schedule ties the amount of equity your advisor earns to the amount of time they work for your company. The schedule makes sure that if your advisor leaves or your agreement with them is terminated early, they don't get all the shares or options you agreed to pay them, only the fraction that have vested up to that point.

      Read more: Advisor Agreements: Shares, equity and vesting for mentors and advisors
    • Should I create a vesting schedule to give equity to an advisor?

      In the same way that you wouldn’t pay someone cash up front for a year’s worth of work, or pay for work that hasn’t yet been done, if you’re paying an advisor in equity, you shouldn’t give it all at once - it needs to be ‘vested’.

      Here’s an example of a vesting schedule:

      • You allocate 3% of the shares in your company to the advisor, to vest over 3 years

      • Every month, the advisor ‘earns’ 1/36th of the total number of shares you allocated to them

      • At the end of 3 years, the advisor’s shares are fully vested. The advisor owns all the shares they were allocated, without any conditions attached, even if they leave or their Advisor Agreement is terminated

      A SeedLegals Advisor Agreement gives you the flexibility to choose vesting provisions that work for both parties. It also covers what should happen if they leave or they’re terminated before all shares have vested.

      Read more in this helpful article: Advisor Agreements: Shares, equity and vesting for mentors and advisors

      Not sure how much equity you should give an advisor? You can read more about it and check out some useful research in this article: How much equity should early stage startups give advisors?
    • Will I need a separate Non-Disclosure Agreement for advisors?

      You don’t need a separate NDA if your advisor has already signed a contract with your company that includes confidentiality terms.

      The SeedLegals Advisor Agreement template includes terms that protect your company’s confidential information. You can customise the template so that it’s exactly what you need. To get started, log into SeedLegals and go to Agreements. If you need any help, chat online with our experts.
    • Is an Advisor Agreement legally binding?

      Yes, an Advisor Agreement is a binding contract and both parties are bound by its terms. There can be legal implications if you or the advisor breach the terms of the contract.
    • What's the difference between a consultant and an advisor?

      A consultant is someone who’s self-employed, and you’re hiring them to work on a specific project and/or for a specified amount of time in return for payment. Their work for you is clearly defined.

      An advisor is someone who gives you business advice. They could be an investor or a mentor, and you reward them either with payment or equity. Their work isn’t so clearly defined because it might be in the form of ideas, sharing of experience or business introductions.

      See other FAQ: What’s the difference between a Consultancy Agreement and an Advisor Agreement?
    • What’s the difference between a Consultancy Agreement and an Advisor Agreement?

      Is the project, timescale or type of work clearly defined?
      On SeedLegals, you’d use our Consultancy Agreement if a worker is self-employed, working on a project with you for a specified amount of time, and you have clear details of the work they'll do.

      Is the work in an advisory or mentoring capacity?
      If someone’s work isn’t so clearly defined – for example, they’re a mentor or investor with experience in your industry and they’re on hand to offer advice, then use our Advisor Agreement instead. You can set out that they agree to give advice and any reward they’ll receive such as payment or equity.

      Some companies have a Board of Advisors to provide strategic advice. That’s when you’d want to use an Advisor Agreement.

      Read more: 7 essential legal docs for startups
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