Key Takeaways
- An advisor with one specific connection to make is worth more than a famous advisor who is too busy to help.
- The ask should be specific before the equity is granted.
- Review your advisory agreements annually. Advisors who are not active should not be on the cap table.
Most startup advisory boards are a collection of impressive names attached to equity agreements that say the advisor will help for a few hours a month. The impressive names go on the website. The hours never materialize. The equity gets vested over two years and the relationship produces nothing of value to either party.
Saim Abbasi has been on both sides of advisory relationships, as an advisor and as a founder seeking advisors. The ones that worked shared specific characteristics. The ones that did not fail in the same predictable ways.
The Specificity Test
Before bringing on any advisor, Saim requires a specific ask: what exactly will this person do for the company, and by when? Not a general "they will help with strategy" or "they have a great network." Something specific: they will introduce us to three enterprise accounts in the healthcare vertical by Q2. They will review our fundraising materials and provide one detailed written critique. They will join two board calls per year and provide written feedback after each.
Specific asks do two things. They filter out advisors who are happy to take equity but unclear on what value they will provide. And they create accountability that makes the relationship meaningful for the advisor too, because doing specific helpful things is more satisfying than being vaguely available.
The Equity Equation
Standard advisory equity ranges from 0.1 to 0.5 percent depending on stage and how active the advisor will be. Saim's view is that equity for advisors should be milestone-based rather than purely time-based. If an advisor commits to making five warm introductions to potential enterprise customers, the vesting accelerates when those introductions happen, not just when time passes.
This structure aligns incentives correctly. The advisor who is earning equity through active help is motivated differently from the one who is earning it just by staying on the advisor list for two years.
Annual Review
Saim audits advisory relationships every 12 months. The question is not whether the advisor is a good person but whether the specific value they committed to deliver was actually delivered. Those who were not active go off the cap table, either through a conversation where a new specific arrangement is agreed to or through a mutual acknowledgment that the relationship has run its course.
"The best advisor you have is the one who picks up the phone on the first ring when you call with a specific problem."