Attracting a venerable group of advisors is a crucial step for
startups and emerging growth companies. It may feel like a daunting
task to ask a potential advisor to sign an Advisor's Agreement.
However, setting clear expectations from the beginning will go a
long way to creating an accountable, transparent relationship with
this new advisor. Esteemed advisors know that as a startup, you are
strapped for cash. Don't fret. Many advisors will look at the
opportunity as a whole to see if this relationship can provide
something other than cash in return for their services (i.e.
networking opportunities or contributing to a particular field). In
any case, one of the most popular ways of attracting a top-notch
advisor is by offering equity in return for advisory
Regardless of the way you compensate your advisors, you can
customize the kind of relationship you have with any advisor by
drafting a proper Advisor's Agreement. Here are some things to
consider when defining the expectations:
Ensure the advisor understands that an employment relationship
is not being created, and include that in the Advisor's
Express the role of the advisor by setting out a mutually
agreeable set of tasks in the form of "Services" they
Limit the advisor's ability to delegate the agreed upon
services. You are asking this particular advisor to
perform the agreed upon services. This is a simple way of making
this clear from the beginning.
Predetermine a minimum number of advisor meetings and write it
out in the agreement. Your potential advisor will likely be on the
go constantly, so it is important that meeting frequency is clear
from the outset.
Attention IP heavy startups, you know who you are! Ask
your advisor to sign a robust IP & Confidentiality Agreement in
conjunction with the Advisor's Agreement. You want to make sure
you can be transparent with your advisor on all issues, and IP is
definitely no exception. A strong IP agreement will make sure
ownership of IP remains with your startup.
Dentons is a global firm driven to provide you with the
competitive edge in an increasingly complex and interconnected
marketplace. We were formed by the March 2013 combination of
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status quo to offer creative, actionable business and legal
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guide to the subject matter. Specialist advice should be sought
about your specific circumstances. Specific Questions relating to
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