Thu, 27 May 2021
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
To ensure an advisor engagement is successful, make sure you set up an advisor agreement.
This is a contract between the advisor and the company and defines the work to be done.
Here are some key points to consider:
Make clear what the advisor will do -- bring experience, contacts, domain knowledge, or other.
Include the frequency of meetings and type.
You could add KPIs to the contract or leave it as a general description.
The more specific it is, the easier it will be to manage later.
If there’s a short duration for terminating the contract, then a general description may be sufficient.
Define the equity compensation and vest it over time.
Include clauses around confidentiality, intellectual property assignment, non-solicit, and non-compete.
This ensures the advisor keeps the company information confidential.
Any IP that comes up from the engagement stays with the company.
The advisor can’t recruit employees away and cannot later compete with the company.
It’s best to bring these issues up and discuss them before the engagement to make sure there’s no misunderstanding later.
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