WHAT IT CONTAINS
The anatomy of a startup advisor agreement
A startup advisor agreement names the engagement level, grants a small equity stake vesting over roughly two years with a short cliff, assigns intellectual property in the advice, and keeps the advisor an independent contractor with no authority to bind the company.
This page describes a class of document in general terms. It is not legal advice, it is not about your situation, and it is not a substitute for the advice of an attorney. Reading it creates no attorney-client relationship.
01
What the instrument is
An advisor agreement papers a relationship that would otherwise run on goodwill: periodic advice traded for a small slice of equity. The dominant standard form is the Founder Institute’s FAST agreement, whose own page states that "The FAST Agreement is used by tens of thousands of entrepreneurs and advisors per year to establish productive working relationships, trading advice and support for a standardized amount of equity." OctoDoc, the signing system of record, treats an advisor agreement as one two-party file with its own marks and sealed state. What follows describes the structure this class of instrument usually carries. It is a general description of a document type and not a substitute for the advice of an attorney.
What distinguishes the instrument from a consulting agreement is that the price is set by a matrix rather than a rate card. The FAST page states the two axes directly: "There are three levels of company maturity that influence the equity compensation: Pre-seed, Seed, or Series A." and "There are also three levels of engagement for an advisor that also influence the compensation: standard, strategic, or expert." The published matrix runs from 0.10% for a standard engagement at a Series A company to 1.00% for an expert engagement at a pre-seed company — the same work is priced at ten times the equity at the earlier stage, because the equity is worth less and the risk is larger.
The grant itself is a compensatory securities issuance, not just contract drafting. SEC Rule 701 is the exemption this class of grant usually travels under, and its text names advisors expressly: it exempts offers and sales under a written compensatory benefit plan or written compensation contract for the participation of employees, directors, officers, consultants and advisors. The written agreement is therefore not a formality — it is the instrument the exemption asks for.
02
Clause order
- 11 — Services and engagement level. What the advisor does and how often, named against a defined level rather than left as unbounded availability.
- 22 — Term. The period of the engagement, usually with renewal by conduct rather than by amendment.
- 33 — Equity compensation. The percentage or share count, the instrument it arrives as — restricted stock or an option — and the plan or board approval it depends on.
- 44 — Vesting and cliff. The vesting period, commonly around two years, and the short cliff that lets an unproductive relationship end with no equity allocated.
- 55 — Expenses. Whether pre-approved out-of-pocket costs are reimbursed; there is no cash fee to draft around.
- 66 — Confidentiality. The company's information stays the company's and the obligation survives the end of the engagement.
- 77 — Assignment of work product. Advice, introductions and materials produced in the engagement are assigned to the company, with the advisor's pre-existing methods carved out.
- 88 — Independent-contractor status. The advisor is not an employee, earns no benefits, and holds no authority to act for the company.
- 99 — No conflicts. The advisor represents that the engagement breaches no other obligation, and discloses competing advisory seats.
- 1010 — Termination. Either party may end the engagement at will; vesting stops, vested equity stays.
- 1111 — Governing law and execution. One state's law, and a signature block for each party with printed name, title and date.
03
The cliff is the exit the agreement is built around
Most of the drafting in an advisor agreement exists to make one outcome cheap: ending a relationship that produced nothing. The FAST page is explicit about the mechanism: "The FAST Agreement does include a three-month "cliff" on equity vesting, allowing for an unproductive advisory relationship to be terminated without having the burden of allocating any equity within the first three months." Termination inside the cliff allocates nothing; termination after it allocates only what time has vested.
That structure is why the effective date matters more here than in most short agreements. Vesting is computed from a date on the face of the document, and a grant papered months after the advice started invites a back-dating negotiation that a signed agreement with a stated vesting commencement date settles in one line.
The record of signing carries the rest. An advisor agreement sealed with both signatures and dates fixes the term start, the vesting commencement and the engagement level in one artifact, and the terminal proof file lets either party show a third party — a later investor running diligence, most commonly — exactly what was agreed and when, checkable at /verify with no account.
04
Commonly negotiated
| Clause | What the negotiation turns on | Which drafting position the wording favours |
|---|---|---|
| Equity percentage | Where the engagement sits on the maturity-by-engagement matrix, and whether the grant is stock or options | Citing the published FAST matrix favours the company, because it turns a negotiation into a lookup |
| Vesting and cliff | The vesting length, the cliff length, and whether a company sale accelerates the unvested balance | Single-trigger acceleration on sale sits on the advisor side; no acceleration sits on the company side |
| Engagement definition | Whether the level is described by outcomes or by a meeting cadence the parties can count | A countable cadence favours both parties, because the cliff decision is then a fact rather than an argument |
| Assignment carve-outs | Which of the advisor's pre-existing frameworks and materials stay out of the assignment | A named-list carve-out favours the company; a categorical carve-out favours the advisor |
| Disclosure of other seats | Whether competing advisory positions must be disclosed only at signing or as they arise | A continuing-disclosure obligation sits on the company side of the draft |
05
A short reference mark set
The reference form runs three to four pages with both signature blocks on the final page: signature, printed name, title and date for the company, and signature, printed name and date for the advisor — seven marks. The company block carries a title because the signer acts for an entity; the advisor signs personally and carries none.
The date marks matter disproportionately in this class, because two clocks start from them: the term, and vesting. A form that states a separate vesting commencement date needs that date filled before sealing, not inferred afterwards from the signature dates.
SOURCES
Where each figure came from
1. “The FAST Agreement is used by tens of thousands of entrepreneurs and advisors per year to establish productive working relationships, trading advice and support for a standardized amount of equity.”
Founder Institute · https://fi.co/fast · checked 2026-08-29
2. “There are three levels of company maturity that influence the equity compensation: Pre-seed, Seed, or Series A.”
Founder Institute · https://fi.co/fast · checked 2026-08-29
3. “The FAST Agreement does include a three-month "cliff" on equity vesting, allowing for an unproductive advisory relationship to be terminated without having the burden of allocating any equity within the first three months.”
Founder Institute · https://fi.co/fast · checked 2026-08-29
4. “This section exempts offers and sales of securities (including plan interests and guarantees pursuant to paragraph (d)(2)(ii) of this section) under a written compensatory benefit plan (or written compensation contract) established by the issuer, its parents, its majority-owned subsidiaries or majority-owned subsidiaries of the issuer's parent, for the participation of their employees, directors, general partners, trustees (where the issuer is a business trust), officers, or consultants and advisors, and their family members who acquire such securities from such persons through gifts or domestic relations orders.”
Electronic Code of Federal Regulations, U.S. National Archives · https://www.ecfr.gov/current/title-17/section-230.701 · checked 2026-08-29
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