How should I compensate mentors and advisors?

Adeo Ressi / November, 2017

Description

Adeo Ressi, Founder and CEO of Founder Institute explains the FAST agreement as a tool for entrepreneurs to find compensation models for mentors and advisors.

Video transcript:

How should I compensate mentors and advisors?

I recommend using the FAST agreement. FAST, it stands for founder advisor standard template. We developed this about 2 years ago and my guess is about a quarter of all mentoring advisor relationships around the world use the template.

What the template essentially does, is it says: okay, what’s the stage of the company? Are you a very early stage company in the middle, or slightly later? And what’s the commitment level of the mentor? Are you gonna be meeting once a month or you gonna go and actually help day to day with business development and some other activities?

And then it actually has a recommended or actual precise amount of equity compensation for each category, so in early-stage engage mentor might get 1% of the company, where is a later stage less engage mentor will get below 2.5%. So one of the reasons we built this agreement is to make the negotiation with the advisor or the mentor very easy. It’s like what level of effort do you want and what level of development is the company? Check check, signed, and done. So, you compensate mentor is generally with equity and if you need an easy way to do that, use the FAST agreement.

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QUICK INFO

  • Adeo Ressi, Founders Institute
  • November, 2017
  • 1:49
  • Startup Basics

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